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FERC Rejects Department of Energy Proposal Benefitting Coal and Nuclear

On January 8, 2018, the Federal Energy Regulatory Commission (FERC) rejected the Department of Energy’s (DOE) Proposed Rule, which would have required organized wholesale electricity markets run by independent system operators (ISOs) or regional transmission organizations (RTOs) to establish tariff mechanisms for purchasing energy from eligible “reliability and resilience resources” and mandated a recovery of costs plus a return on equity for such resources. Eligible reliability and resilience resources would have to be (1) located within an RTO/ISO, (2) able to provide essential reliability services, and (3) have a 90-day fuel supply on-site. Practically, these requirements would limit participation to coal and nuclear plants. After reiterating support for “pro-competition, market driven” regulation of wholesale electricity markets, FERC rejected the Proposed Rule. Under the Federal Power Act, FERC may require RTOs/ISOs to implement tariff changes if there...

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Department of Energy Proposes Rule Benefiting Coal and Nuclear to FERC

On September 28, 2017, the US Department of Energy (DOE) submitted a proposed rule to the Federal Energy Regulatory Commission (FERC) that, if implemented, could reshape organized wholesale electricity markets. Citing electric grid reliability and resiliency issues like the 2014 Polar Vortex and recent hurricanes, DOE asked FERC to enact a new compensation system for coal and nuclear power plants—dubbed “fuel-secure resources” by DOE. Coal and nuclear plants have been retiring prematurely and, according to DOE, the retirements are “threatening the resilience of the Nation’s electricity system.” In order to stem the tide of retirements, DOE submitted to FERC a proposed rule requiring organized wholesale electricity markets run by independent system operators (ISOs) or regional transmission organizations (RTOs) to develop and implement market rules that “accurately price generation resources necessary to maintain the reliability and resiliency” of the bulk...

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DOE Says Wind Power Creates Lots of Jobs!

According to the Department of Energy (DOE) renewable energy wind installations had explosive growth through 2016, and added approximately 32,000 jobs since 2015, to a total of 102,000! In the Wind Technologies Market Report, DOE says the Production Tax Credit (PTC) is directly responsible for the expansion. Congress, however, is phasing out the PTC, which DOE believes will lead to a slowing of the wind energy industry. The PTC is incrementally being phased out over a five year period, and ends completely in 2020. Read here for more information.

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Analysis of Energy and Tax Proposals in the 2018 Budget Proposal

President Trump released his budget proposal for the 2018 FY on May 23, 2017, expanding on the budget blueprint he released in March. The budget proposal and blueprint reiterate the President’s tax reform proposals to lower the business tax rate and to eliminate special interest tax breaks. They also provide for significant changes in energy policy including: restarting the Yucca Mountain nuclear waste repository, reinstating collection of the Nuclear Waste Fund fee and eliminating DOE research and development programs. Read the full article.

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D.C. Circuit Denies Rehearing on Nuclear Waste Fee Decision

The D.C. Circuit last week denied the Department of Energy’s (DOE) petition for en banc review of the court’s November decision holding that the DOE could not continue to collect nuclear waste fees from utilities.  The Nuclear Energy Institute (NEI) and National Association of Regulatory Utility Commissioners (NARUC) filed suit after the DOE’s termination of the Yucca Mountain repository program in 2010.  The organizations argued that the DOE could not continue to collect the fee from utilities if it did not have a waste management plan in place.  Last fall, the D.C. Circuit agreed and held that the DOE could not continue to collect the nuclear waste fee of one-tenth of a cent per kilowatt-hour. In January, Secretary Moniz sent a letter to the Senate requesting that the fee be reduced to zero, in accordance with the court’s mandate.  The Secretary expressed his discontent with the court’s decision stating that “this proposal, mandated by the Court of Appeals,...

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LNG Exports Continue to Await DOE Approval

by Daryl Kuo The discovery and accessibility of vast domestic shale gas reserves in the United States has motivated states and industry alike to lobby heavily for the approval of liquefied natural gas (LNG) exports.  LNG exports to non-Free Trade Agreement (FTA) countries, including China and Japan, are of particular interest because estimates for exports to those countries are as high as 16 billion cubic feet per day, more than ten times greater than all U.S. LNG exports in 2011.  So far, the U.S. Department of Energy (DOE) has approved only one LNG export project to non-FTA countries, and that approval is being challenged. Meanwhile, more than a dozen applications sit in DOE’s queue pending the release of a critical study by the end of the year. The debate over exports to non-FTA countries is likely to become more intense in the coming months once that study is released and subjected to a public comment period prior to any...

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DOE Announces Grant Program for Bio-Oils Research to Produce Renewable Transportation Fuels

by Bethany K. Hatef The Department of Energy (DOE) announced that it has $15 million available to award for the development and demonstration of biomass-based oil supplements, or bio-oils.  The grants will go toward research and development projects aimed at speeding the development of thermochemical liquefaction technologies to produce bio-oil feedstock from high-impact feedstock biomass or algal biomass.  Successfully produced bio-oils could then be blended with petroleum to produce transportation fuels, including gasoline, diesel, and jet fuels, without significantly modifying oil refining processes for conventional transportation fuels, existing fuel distribution networks, or engines. DOE explained in the early April announcement that it expects to fund five to ten projects in 2012.  The projects will aim to produce bio-oil prototypes that can be used for testing in refineries and for research and development of bio-oil technologies and...

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