In a move that was widely anticipated across the energy industry, the Federal Energy Regulatory Commission (FERC) today issued an order that terminated a notice of proposed rulemaking that had been initiated in October 2017 in response to a demand by Energy Secretary Rick Perry that FERC enact rules to compensate certain resources for what he then termed “grid resiliency.”   Today’s order punts the issue of grid resiliency to the organized energy market operators, who now have 60 days to provide FERC with specific information about how those operators are addressing grid resiliency on their respective systems and whether there remain any gaps to address.  FERC has thus effectively washed its hands of the Secretary’s proposal, leaving it for the market operators to put an end to (or reshape) the issue of “resiliency.”  FERC will consider the information submitted by the market operators, including the public’s response thereto, in taking a more “holistic” look at what “grid resiliency” means and whether anything more must be done about it.  The short of it, though, is that FERC seems intent on not arbitrarily tinkering with market forces, refusing in this instance to prop up uneconomic coal and nuclear facilities using payments for loosely-defined and controversial characteristics.  Instead, FERC reaffirmed its support for markets and market-based solutions, acknowledging that sometimes the market compels retirements simply because a technology has become uneconomic.

And so while the term “grid resiliency” may not yet leave our lexicon and will be given additional consideration in the months or years to come, I think it’s safe to say that what comes of compensating resources for “grid resiliency”, to the extent it occurs, will look little or nothing like what Secretary Perry had intended.

 

Photo of Jason Johns Jason Johns

Jason Johns advises independent power producers, utilities, investors, and large users of gas and power resources with matters arising in power markets and state and federal energy regulatory arenas. Jason appears regularly in proceedings before the Federal Energy Regulatory Commission and in negotiations…

Jason Johns advises independent power producers, utilities, investors, and large users of gas and power resources with matters arising in power markets and state and federal energy regulatory arenas. Jason appears regularly in proceedings before the Federal Energy Regulatory Commission and in negotiations at the ISO/RTO level, where he represents independent power developers and utilities. His experience includes negotiating major facility contracts, such as interconnection, transmission, and power purchase agreements; prosecuting disputes at FERC; and counseling and defending clients on issues related to regulatory compliance.

Jason also works closely with large commercial and industrial users of electricity and gas, such as aerospace companies, pulp and paper mills, steel mills, and tech company data centers. In that role, Jason helps clients negotiate power and gas supply contracts, interstate pipeline capacity asset management agreements, and pipeline bypass agreements. Jason has also assisted these clients with demand management agreements, the installation of on-site resources (such as battery storage, fuel cells, and solar PV), and with retail and wholesale power purchase agreements for renewable energy and other resources. Jason also serves as a board member of The Climate Trust, a national leader in carbon offset projects and innovative climate change solutions.

Jason and his wife are parents to two growing boys, and they live just outside of Portland, Oregon.

Click here for Jason John’s full bio.