The CEO of the largest nuclear utility in the country on Thursday pressed federal grid regulators to come to grips with climate change by prioritizing incentives for emission-free technology in the markets overseen by Washington.
“We would ask that the commission be able to come to grips and address the climate imperatives that the states are driving us to comply with, to find a way to work with the market rules,” Crane Exelon president and CEO Christopher Crane told Federal Energy Regulatory Commission Chairman Neil Chatterjee at a conference held at the agency’s headquarters.
Crane said his company is experiencing the effects of climate change through increased flooding and weather events affecting the grid and his company’s operations.
The all-day FERC conference was meant to assess the need for new market-based incentives to assist the utility industry in guarding against cyberattacks and other security events.
Crane said his company is more concerned with maintaining the current transmission line incentives it receives from FERC, adding that Exelon would not recommend FERC approving new incentives.
“It is our belief that the electric industry doesn’t need a new set of incentives to continue investing in critical infrastructure,” Crane said. “We’re more concerned about securing the current design than looking to add on.”
He said that the bigger priorities are instead climate change and state greenhouse gas rules, in addition to preserving transmission incentives and the right to receive a fair return on power line investments.
Utilities with nuclear power assets are faced with the premature closure of several plants due to increased competition from low-cost natural gas power plants. The industry is supporting state subsidy programs, zero-emission credits, and other programs meant to keep nuclear a part of the energy mix.
Some states, like Pennsylvania, are debating whether to include nuclear power as part of existing renewable energy programs that require utilities to provide a certain amount of a state’s electricity from renewable energy.
Crane said utilities are responding to climate change with investments to build resilient electric power systems. But it is the states that are looking at ways to mitigate the effects of “what they believe is the driver of climate change, including reducing greenhouse gas in the power sector by supporting emission-free generation,” he added.
States in the Northeast, like New York and Massachusetts, are seeking to increase their reliance on zero-emission generation, with Democratic Gov. Andrew Cuomo of the Empire State instituting a special program to subsidize nuclear. Those incentives are now being challenged in the Supreme Court.
The grid operator PJM Interconnection, the 13-state grid operator that FERC oversees, launched a discussion last week on how to include a carbon price in its market design. The discussion was kicked off on March 21 at PJM’s Markets and Reliability Committee meeting.
PJM has not decided on what it will do. However, any change in PJM’s market design to include a new carbon pricing regime would have to be reviewed and approved by FERC.
