Staff Report to the Secretary on Electricity Markets and Reliability

Department of Energy

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What They're Saying About the Report

“We commend Secretary Perry and the Department of Energy for studying the challenges facing the electricity grid. One of the biggest challenges is how to preserve the nation’s coal fleet so it can continue supporting a reliable and resilient electricity grid.”

Paul Bailey
CEO of the American Coalition for Clean Coal Electricity

“API welcomes the opportunity to review this report from the Department of Energy that focuses on promoting reliability and resiliency in the electric system. Clean and abundant natural gas, which today produces more electricity in the United States than any other fuel, is a reliable and resilient energy resource that generates the power needed by millions of homes and businesses across the country. In fact, increased-use of this affordable resource gives our electric system the flexibility needed to meet constantly, and often rapidly, changing electricity demands. Technological innovation and market forces, without government mandates and subsidies, have allowed natural gas to bring great benefits to consumers – saving households an estimated $1,337 in energy costs in 2015. And the increased use of natural gas for power generation has been a primary driver in reducing carbon emissions in the power sector to near 30-year lows. As we review this report, we look forward to being part of the important conversation that the Department of Energy started today.”

Marty Durbin
API Executive Vice President and Chief Strategy Officer

“[The report] highlights many activities that the commission is carefully considering, including examining ways to enhance wholesale electric capacity markets and improve price formation in those markets, to increase electric and gas coordination, and to assure bulk power system reliability and resilience. The commission will remain focused on these and other issues that are critical to maintain the nation’s competitive wholesale electric markets and keep the lights on.”

Neil Chatterjee
FERC, Acting Chairman

“[The Study] reaffirms our view that nuclear energy is a key and necessary contributor to a clean, reliable and resilient electric grid. In the 10 years since the last comprehensive grid study by our government, electricity markets have changed radically. Today electricity markets do not properly credit nuclear energy for the numerous benefits it delivers, forcing plants to close years before the end of their useful lives and compromising grid reliability and resiliency in the process.”

Maria Korsnick
Nuclear Energy Institute

“The report rightly acknowledges the problems created by a deepening penetration of variable renewable energy (VRE)…Specifically, government-guided increases in solar power penetration reduce the grid’s capacity to meet peak demand, as the DOE report indicates.”

Institute for Energy Research

“The DOE study underscores the critical and increasing role of renewables in the nation's energy mix and we are applaud Secretary Perry and his team for their thoughtful approach to this important study. Residential solar plays a key part in this rapidly evolving landscape and we look forward to working with the DOE and all regulatory agencies at both the federal and state levels to support reforms that empower energy consumers, while adding to the resiliency and reliability of our nation's energy infrastructure. As long term strategies are developed, the market for improved system resilience will come partly from the solar industry and the advances that are being made by the innovative companies within this industry. The rapid advancement in battery capabilities and cost reductions, when paired with residential solar, not only create cost effective and reliable power, but given the ability to deliver power when the grid is down, presents even greater potential for power reliability and system resiliency than the current centralized generation only grid.” 

John Berger
Sunnova Energy Corporation, Chief Executive Officer

“The report plainly states that advanced energy storage systems are critical to ensuring that electricity is reliable, affordable and secure. We also agree with the key findings that better strategies are needed by markets and in resource planning to properly reward the values that energy storage systems provide to the grid, especially increased reliability and resiliency.”

Kelly Speakes-Backman
CEO of the Energy Storage Association

“Exelon is pleased that the Department of Energy has called for urgently needed energy market reforms as its first priority for the new FERC to address quickly. These reforms will help preserve clean energy sources and ensure critical American assets remain part of the mix, including baseload nuclear plants that provide more than 60 percent of our nation’s emissions-free energy. We applaud the Department of Energy for their work, and urge FERC and the RTOs to swiftly enact common-sense reforms that will help safeguard the reliability, resilience, diversity and affordability of our supply of electricity.”

Exelon Corporation

Tom Kiernan, CEO of the American Wind Energy Association, said his group agrees with the department “that it makes sense to determine how a portfolio of domestic energy resources can ensure grid reliability and resilience.” He also said the report “provides a number of valuable policy recommendations.”

“The electric grid reliability study results confirm that coal remains a critical energy source for consumers and businesses across the Midwest and throughout the United States. This analysis also reaffirms that baseload generation resources are critical to meeting our nation’s energy demand today and in the future. Utilizing coal as part of a broad energy portfolio not only ensures reliability for our nation’s electric grid it also is far less expensive than heavily subsidized renewable fuels. The Lignite Energy Council commends Secretary Perry for initiating this important study and for his continued focus on taking the necessary actions to ensure the reliability of our nation’s electricity grid and America’s energy security.The grid study reflects current challenges facing regional utilities and transmission organizations. The electric utility business has changed because of natural gas from shale, increased federal regulations and federal incentives that pick winners and losers. While additional work is required, this study shines a bright light on the changes that can potentially harm the reliability and the resilience of the grid during temperature extremes.” 

Jason Bohrer
Lignite Energy Council

“I am very pleased that Secretary Perry and the Department of Energy released this report examining the potential for reliability and resiliency issues within our electricity supply and delivery systems. I urge my colleagues to recognize that without coal our country will face a reliability crisis in the very near term. This study recognizes the reality that today’s electric markets and market rules have tilted the playing field against traditional baseload generation, particularly nuclear and coal-fired power plants. These plants deliver 24/7 reliable resilient power across our nation but they are increasingly disadvantaged due to a number of factors. The DOE’s analysis reflects the reality that there are areas of real concern that we must monitor and stand ready to address.”

U.S. Senator Joe Manchinn, III (D- WV)

 “We appreciate the effort undertaken by the Department of Energy to produce this report. A reliable and resilient electric system is essential to protecting public health and fostering economic growth and job creation. The findings of this study reflect the chief interests and concerns of state regulators, whose mandate is to serve the public interest by ensuring safe, adequate, reliable and affordable energy service. We—and our members—will undertake a careful review of the study and its recommendations, which have implications for both state and federal regulators.”

John W. Betkoski III
National Association of Regulatory Utility Commissioners (NARUC) President

“EEI commends the U.S. Department of Energy (DOE) for undertaking this study to examine key factors that can enhance the resilience of the energy grid, our nation's most critical infrastructure. While we are still thoroughly reviewing the study, EEI has long advocated that our customers are best served by public policies that promote a balanced and diverse energy mix, which includes both traditional and renewable energy sources, and that also recognize the vital role 24/7 energy sources play in sustaining a secure, reliable, and resilient energy grid. We also believe it is important to value investments in more robust infrastructure, while maintaining a diverse energy mix that eliminates single points of failure. Whether to limit impacts from inevitable storms or natural events or to prepare for malicious cyber or physical attacks, supporting a resilient energy grid is an investment in national and economic security.”

Tom Kuhn
Edison Electric Institute (EEI) President

“The Grid Study is an important first step in initiating a national dialogue about the future of the American electricity system. While utilities, electric cooperatives, and grid operators have been able to absorb the changes brought about by increases in renewable energy and the abundance of low-cost natural gas, it is clear that they will have significant challenges as the pace of change accelerates. While we know that there will be massive changes to our electricity portfolio over the next several years, American families, farms and small businesses will continue to rely on affordable and reliable energy. We need to continue to encourage our elected officials to keep asking the right questions to make informed decisions on energy that will result in the development of honest, thoughtful policies that will benefit families and small businesses that rely on these leaders to be the voices for their communities.”

David Holt
President, Consumer Energy Alliance