Testimony Defends, Argues Justification of FERC Reliability Rule

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H. Sterling Burnett

Managing Editor, Environment & Climate News at The Heartland Institute

H. Sterling Burnett, Ph.D. is managing editor of Environment & Climate News and a research fellow for environment and energy policy at The Heartland Institute. Burnett worked at the National Center for Policy Analysis for 18 years, most recently as a senior fellow in charge of NCPA’s environmental policy program. He has held various positions in professional and public policy organizations, including serving as a member of the Environment and Natural Resources Task Force in the Texas Comptroller’s e-Texas commission.

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In written testimony submitted in support of the Federal Energy Regulatory Commission’s (FERC) recent grid reliability and resilience pricing proposal, ratepayer Susan Fleetwood says those objecting to the rule ignore the fact renewable energy sources provide an inferior product at above market rates due to favorable government policies.

FERC has proposed to compensate, and thus keep operational, baseload coal and nuclear power plants that maintain on-site fuel sufficient for 90 days of operation.

Fleetwood says ratepayers are paying more for electricity than they would absent government support for renewables, writing:

Decisions to build new renewable (wind and solar) generating capacity are decidedly not based on the risks and rewards of the market economy. Without the production tax credit for wind (and investment tax credit for solar), there would be no wind farms of the scale that exist today.

 

The … American Wind Energy Association (AWEA) acknowledges … new investments in wind have largely disappeared when funding for the production tax credit (PTC) lapses. ‘Initially established in 1992, the PTC has expired five times: 1999, 2001, 2003, 2012 and 2013. This led to a 76% to 92% decrease in domestic investment following each of those years.’

 

New wind energy earns $24/MWH in production tax credits (PTC) from U.S. taxpayers for the first ten years of a project’s life ….”

According to the Lawrence Berkeley National Laboratory, lengthy power purchase agreements with electric utilities and non-utilities alike – including Google, Facebook, Amazon, and others – averaged $70/MWh, guaranteeing wind operators extra market compensation two to four times the $20 to $30/MWh received by coal, nuclear, and natural gas power plants.

Fleetwood concludes: “Renewable energy is the Trojan horse that is quickly destroying existing energy infrastructure and endangering the reliability and resiliency of the nation’s electric grid.”

Her testimony is worth reading in full.