The Federal Energy Regulatory Commission on Monday killed a key proposal by Energy Secretary Rick Perry to subsidize coal and nuclear power plants.
The federal utility watchdog said it is "terminating" the proposal submitted to the commission by Perry, saying it was found to be unjustified after a thorough evaluation.
Perry had argued that FERC should provide market-based incentives to coal and nuclear power plant owners to make the grid more resilient if faced with the threat of major outages from extreme weather or other problems. The idea was widely opposed by the wider energy industry, from oil and natural gas producers to wind and solar.
All five FERC commissioners agreed that Perry's proposal was not justified under the Federal Power Act's key criteria for assessing whether a policy is just or reasonable.
"Nonetheless, we appreciate the secretary reinforcing the resilience of the bulk power system as an important issue that warrants further attention," FERC said.
"To that end, we are initiating a new proceeding ... to specifically evaluate the resilience of the bulk power system in the regions operated by regional transmission organizations and independent system operators," the commission said.
FERC oversees the grid operators that run the wholesale power markets, which make up the largest electricity markets in the country. The commission wants the grid operators, such as PJM Interconnection and the Midcontinent Independent System Operator, to submit information on some resilience issues in the coming weeks to assess if there are concerns.
"The resilience of the bulk power system will remain a priority of this commission," FERC said in its Monday order. "We expect to review the additional material and promptly decide whether additional commission action is warranted to address grid resilience."
Perry said in response to the decision that his proposal was meant to initiate "a national debate on the resiliency of our electric system."
He said that he looks forward "to continuing to work with the commissioners to ensure the integrity of the electric grid.”