This story was updated at 4:50 p.m. EST.
The Federal Energy Regulatory Commission rejected a major proposal today from Energy Secretary Rick Perry that would have moved to boost coal and nuclear plants in the electricity markets FERC oversees.
DOE’s proposal said preventing the retirements of power plants that are able to keep a 90-day supply of fuel on-site was necessary for resilience of the electric grid.
The Perry directive, which he issued in September and which resulted in months of frenzied lobbying, did not demonstrate that existing market rules are "unjust, unreasonable, unduly discriminatory or preferential," FERC wrote in a ruling today.
"The Proposed Rule did not satisfy those clear and fundamental legal requirements under section 206 of the [Federal Power Act]," the agency wrote.
FERC also wrote that it disagreed "with assertions that an adequate record exists through the Commission’s price formation efforts to support the Proposed Rule’s action regarding bulk power system resilience."
The agency did open a new proceeding to "take additional steps to explore resilience issues in the [regional transmission organizations and independent system operators]." That docket will aim to develop an understanding of what resilience actually means for the grid and to understand how each grid operator addresses the issue.
"The resilience of the bulk power system will remain a priority of this Commission. We expect to review the additional material and promptly decide whether additional Commission action is warranted to address grid resilience," FERC wrote.
Perry said in a statement this afternoon that he appreciated FERC’s consideration.
"As intended, my proposal initiated a national debate on the resiliency of our electric system. What is not debatable is that a diverse fuel supply, especially with onsite fuel capability, plays an essential role in providing Americans with reliable, resilient and affordable electricity, particularly in times of weather-related stress like we are seeing now," he said.
DOE spokesperson Shaylyn Hynes said that Perry is "pleased that FERC heard his call and is directing the regional [grid operators] to take steps to continue to address these important issues. He looks forward to working with the Commissioners to ensure that Americans will have a reliable, resilient and affordable supply of electricity in the years to come."
All five FERC commissioners approved the order.
Neil Chatterjee, who served as chairman for three months last year and during that time pushed for FERC to adopt a version of DOE’s proposal, wrote that he agreed with the order "with the expectation that it is only the first step in a more systematic effort by the Commission, over both the near and long term, to ensure the resilience of the nation’s bulk power system."
