Enviro groups take new FERC rules for PJM to federal court

The Sierra Club, Natural Resources Defense Council, the Union of Concerned Scientists, and Earthjustice filed a July 8 lawsuit challenging the Federal Energy Regulatory Commission’s (FERC) approval of new PJM Interconnection rules that they said would impose significant costs on customers and severely handicap clean energy participation in PJM’s capacity markets.

The club said in a July 8 statement: “The rules are tailored to suit fossil fuel resources despite clean energy’s rapid growth, low costs, and indispensable contributions to grid reliability across the United States during extreme weather emergencies. These rules will increase electric bills for over 61 million customers in thirteen mid-Atlantic and Midwestern states.”

“PJM’s rules would significantly increase costs to customers and punish the same clean energy and demand response resources that helped keep the lights on during the extreme weather events of the last couple of years,” said Casey Roberts, staff attorney at the Sierra Club. “America’s rapidly growing clean energy sector has shown time and again that it is a vital part of our energy markets, and these new rules give polluting fossil fuels an unfair advantage to detriment of energy customers’ wallets.”

The plaintiffs in this lawsuit filed at the U.S. Court of Appeals for the D.C. Circuit said that PJM rushed to develop these new rules in response to the harsh winter of 2014 because many fossil power plants had failed to deliver electricity in the extreme cold despite being paid for their capacity commitments. The new rules require that all resources perform any time of year and be compensated even more than under the current rules. The lawsuit says that while this always-available, all-year requirement appears to be resource neutral, it disadvantages – or outright excludes – resources that perform reliably and cheaply in the winter (like wind) and the summer (like solar and smarter use of air conditioning), but not necessarily all-year-round. Notably, they said that some of these resources played a critical role in keeping the lights on during the 2014 winter emergencies.

“We’re challenging FERC’s approval of PJM’s new rules for how it acquires electricity to serve customers in the future because they favor expensive, polluting power plants over clean energy,”  said Jennifer Chen, an attorney with the Sustainable FERC Project housed within the NRDC. “That’s a bad deal for consumers and the environment. PJM, which procures more electricity than any other grid operator, shouldn’t be increasing its reliance on fossil-fueled power to meet future electricity demand when affordable wind, solar, and other clean energy options are readily available.”

The brief lawsuit notice doesn’t go into details. The plaintiffs are seeking review of two orders issued by FERC on June 9, 2015, and May 10, 2016, approving PJM’s proposed changes to its Reliability Pricing Model.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.