FERC Tries to Block NJ Renewable Energy Efforts- Sides With Polluters

Federal Energy Regulatory Commission (FERC) has rejected two proposals by PJM Interconnection ruling that state subsidies of nuclear and renewable energy are ‘unjust and unreasonable’. In a 3-2 vote, FERC’s decision will potentially block efforts like Governor Murphy’s Executive Order No. 8 for offshore wind. According to FERC, state programs that support renewable energy are causing price distortions and costs shifts in wholesale markets. Calpine Inc., America’s largest natural gas generator argued that state intervention in the market could cause a gradual decay in the capacity market. New Jersey and environmental advocates argue that FERC’s order improperly intervenes in state energy policies, such as the renewable energy mandates.

“What FERC is doing is trying to block renewable energy and help dirty fuels like coal and natural gas. They are basically putting their thumb on the scale against moving forward with wind and solar and expanding our renewable energy portfolio. This ruling will attempt to block our efforts of having 3500 MW of Wind, RPS, or anything else. FERC is letting coal and natural gas control the energy market while blocking renewables. What’s even worse is at the same time they are stripping our right to decide on what our state’s energy generation mix should be. This could prevent New Jersey from meeting Governor Murphy’s clean energy goals. FERC is in lockstep with the fossil fuel industry. They will overstep their authority to try to block renewable energy and rubberstamp dirty fossil fuel infrastructure” said Jeff Tittel, Director of the New Jersey Sierra Club. “Since renewable energy is taking off with more proposals for offshore wind and solar, FERC is trying to tilt the scale back to dirty energy. They are siding with Big Oil and coal over green jobs.”

For New Jersey, the order by FERC could block long-standing legislative initiatives to promote cleaner sources of energy like solar power, as well as the state’s proposed subsidies to keep nuclear power a part of its energy mix by having ratepayers subsidize plants it deems uneconomic. FERC took particular aim at two forms of state “out-of-market support” for generation resources: zero emission credits (ZECs), designed to compensate nuclear plants for generating power without producing carbon dioxide, and state renewable portfolio standards (RPS). FERC’s ruling states that the price distortions from these resources “compromise the capacity market’s integrity” and “create significant uncertainty, which may further compromise the market.”

“FERC ‘s ruling is part of Trump’s war on the environment. They are attacking state efforts towards achieving Governor Murphy’s clean energy goals by 2050 with this ruling. Murphy is trying to move us forward when it comes to clean energy and green jobs but FERC’s ruling will block that from happening. If we want to get to 100% green energy by 2050 we need to focus on renewable energy such as solar and wind,” said Tittel. “New Jersey needs to fight for these important programs that will help reduce our greenhouse gases and fight climate change.”

Gas generators like Calpine, Inc. and coal generators argue policies like nuclear subsidies and renewable energy mandates allow those resources to bid into the capacity market at lower prices than they otherwise would, suppressing the clearing price for the whole market. FERC has 30 days to respond to the rehearing requests, after which it could open a new comment period on the ruling. If the commission upholds its ruling that the PJM rules are unjust and unreasonable, stakeholders will have to move fast to respond before the market’s next capacity auction in May 2019.

“Coal and gas companies know that renewable energy is finally picking up and now they are trying to do everything they can to stop states from transitioning. FERC’s decision to side with dirty energy over the environment is not surprising. Just like when they approve pipelines, they do not take into account the secondary impacts of preventing renewable energy infrastructure on a state and federal level. We have been fighting FERC over pipelines and we fight them over this too,” said Jeff Tittel, Director of the New Jersey Sierra Club. “New Jersey needs to stand up against FERC and stand up to corporate polluters. We need to fight back to protect out clean air, our clean water, and make us resilient towards climate change.”