On Friday, U.S. Department of Energy (DOE) Secretary of Energy Rick Perry proposed a dramatic change to U.S. Federal Energy Regulatory Commission (FERC)-regulated energy markets.  His rule would compensate “reliability and resiliency” resources potentially both on a market rate and/or a cost-of-service rate.  He has put forward a tight timeline for the rule, directing FERC to make a final action on the proposed rule within 60 days after publication in the Federal Register, or alternatively, to adopt the current rule as an interim measure to be modified in the future.  A complete analysis of the rule by Hogan Lovells can be found here.

Although geared towards existing nuclear and coal power plants, in the long term advanced reactors could be well-positioned to benefit from the new rule.  It is unclear if this rule will stem the tide of coal plant retirements, and without coal, nuclear power for the most part will be the only remaining generation source capable of meeting the requirements to benefit under the rule (e.g., eligible generation sources must have 90 days-worth of fuel on site).

Comments will be collected on the rule for 45 days after publication in the Federal Register.  We encourage all next-generation nuclear providers to get involved and comment on the new rule.  Instead of a short-term measure to support existing resources, this rule should be seen as a fundamental recognition of one of the many uncompensated for benefits of nuclear power.  If properly structured, this rule has the potential to support the nascent next-generation nuclear industry as it develops.  For any questions on the proposed rule or how to comment on it, please contact the authors.