On Thursday, the U.S. Federal Energy Regulatory Commission ordered the largest U.S. power grid operator to push state-subsidized solar and wind power suppliers to boost auction prices, a decision that mocked renewable energy firms and environmental groups as a partisan attempt to protect fossil fuels.
In a statement, FERC said the order will preserve the integrity of the capacity market for power grid operator PJM Interconnection, which charges generation suppliers to keep their power plants available for operation to ensure reliability of the network.
FERC’s two Republican commissioners voted to extend the market price floor scope to state-subsidized generators, with Richard Glick, the Democrat, dissenting.
In the remark, FERC Chairman Neil Chatterjee said the committee had a responsibility to “provide an equal footing for all resources.” Chatterjee and the other Republican of the panel, Bernard McNamee, were appointed by President Donald Trump, an outspoken fossil fuel proponent.
PJM running the grid in 13 U.S. sections or in whole. Mid-Atlantic and Midwestern states said in an emailed statement that they had not yet received the order from FERC and would start discussing their content at a January meeting with stakeholders.
Renewable energy options such as wind and solar, which are supported by many governments, will be required to meet a minimum price in the capacity auction even though their technology’s cost declines now often make them cheaper than alternative fossil fuel.
Environmental groups including the Sierra Club and the Concerned Scientists Union said the decision would add billions of dollars to the energy costs of customers.
In past years, many states have enacted policies that promote the continued existence or maintenance of some types of generation to meet carbon reduction and other environmental goals, such as nuclear and renewable energy. Such incentives have been criticized by natural gas power plant operators as they claim they are reducing what their plants are getting in efficiency and energy markets.
In a statement, the American Wind Energy Association said the decision “threatens the rights of states and hinders their ability to provide their citizens with more clean energy.
The decision of FERC is based on a previous order released in June 2018, which found that out – of-market payments made by PJM states to finance the activity of certain generation resources undermine the stability of the capacity market of PJM.
Chatterjee said in his statement that states would still be able to choose which sources of generation to fund.