Federal regulators’ rule changes to prop up coal and natural gas power plants could severely disrupt progress toward a clean, renewable energy future – and cost 65 million mid-Atlantic and Midwest consumers tens of billions of dollars.
In December, the Federal Energy Regulatory Commission, or FERC, expanded the scope of a rule setting the minimum price of electricity in the PJM regional power grid – the nation’s largest, taking in all or part of 13 states stretching from the Atlantic seaboard to the Chicago metro area. The Minimum Offer Price Rule, or MOPR, was designed to prevent large utilities, which primarily operate fossil fuel plants, from manipulating prices for power sold to other companies on the wholesale market.
But FERC – whose four members were all appointed by President Trump – ruled that the MOPR will now also apply to all energy sources the commission says are subsidized by the states. That means primarily wind and solar power, for which customers often receive state rebates. This will significantly raise the price of renewable energy, which is already cheaper than fossil fuels and getting cheaper all the time. A study by researchers at Grid Strategies LLC estimated that the rule could cost PJM customers up to $24 billon over the next decade.
Strong criticism of the new rule came from all quarters – including one of Trump’s FERC appointees.
In a dissenting opinion, FERC Commissioner Richard Glick wrote: “From the beginning, this proceeding has been about two things: Dramatically increasing the price of [energy] in PJM ... and slowing the region’s transition to a clean energy future.”
"FERC's order is an unfortunate and unnecessary transformation of a limited rule designed to prevent market manipulation into a price support scheme for existing coal and natural gas power plants," said a statement from Jeff Dennis, general counsel and managing director at Advanced Energy Economy, a national association of business leaders promoting renewables.
“The very last thing the federal government should be doing right now is taking an economic engine like offshore wind or solar and making them artificially more expensive to rev up for our communities,” Dereck Davis, one of 18 Maryland state legislators to file comments to FERC objecting to the rule, said in a statement reported by Utility Dive. “As we face a pending recession, we need to be able to protect our ratepayers and embrace the jobs that can be created in the renewable sector.”
In April, renewables advocates and industry groups filed what Utility Dive called “a flurry of lawsuits” against the new rule. Maryland and New Jersey are considering leaving the PJM market altogether because they fear it will undercut their climate and renewable energy goals.
Meanwhile, FERC is considering a petition from what appears to be a utility front group that could discourage homeowners from installing solar panels.
In April, the New England Ratepayers Association, or NERA, filed a petition at FERC to derail state net metering laws. These laws require utilities to credit customers for excess electricity generated by their solar panels and fed back into the grid.
NERA refuses to disclose its membership but, in its filing, makes arguments that mirror the attacks electric utility companies have mounted against net metering for years. Ari Peskoe, director of the Electricity Law Initiative at the Harvard Law School Environmental and Energy Law Program, told Utility Dive, “The attorneys that are on this petition are typically working with big utilities and other energy companies.”
If NERA wins, it could cut in half the compensation for power shipped to the grid from residential solar arrays. GreenTech Media says it may seem unlikely that FERC would “wade into the murky waters” of state-versus-federal authority, but the MOPR ruling could be a sign that the Trump-appointed commission is “willing to assert preemption over state rulemaking.”
More than 30 advocacy groups, state regulatory agencies, utilities and renewable trade organizations have intervened in the proceeding. In an effort organized by the Center for Biological Diversity’s Energy Justice program, EWG signed onto a letter with more than 400 national and state advocacy organizations, urging FERC to rule against NERA. The letter said:
State net metering policies and distributed solar systems are foundational to achieving the nation’s urgently needed clean and just energy transition - to address historical environmental injustices, fight the climate emergency, and ensure long-term resilience. Families classified as low-wealth and Black, Brown, Indigenous and other communities of color are disproportionately impacted by the pollution from centralized dirty fossil power and the ravage of climate disasters.