FERC Declines DOE-Proposed Resiliency Compensation, Will Review Issue

FERC's order refuses to adopt cost-of-service rates for generation with secure on-site fuel supply in organized markets, but leaves open the possibility of future FERC action to address system "resiliency" concerns identified by Secretary of Energy Rick Perry.

The Federal Energy Regulatory Commission (FERC or the Commission) rejected the US Department of Energy's (DOE's) proposed changes to organized market rules that would have permitted certain baseload resources with at least 90 days of on-site fuel to be paid a cost-of-service rate instead of relying on compensation under market-determined prices.^[1] Although FERC requested further comment and input on the importance of "resiliency" in organized markets, the January 8, 2018 order makes it unlikely that FERC will act on this issue in the near term.