BISMARCK, N.D. — The U.S. Department of Energy has issued a proposal that would compensate power plants for keeping coal on hand and add value to North Dakota’s coal.
The proposal issued Friday to the Federal Regulatory Energy Commission would pay power plants for having 90 days’ worth of fuel on-site, The Bismarck Tribune reported. The department said the proposed rule would make power plants more reliable and necessary to power production when renewables aren’t available.
“This is a big policy change,” said Jason Bohrer, president of Lignite Energy Council.
Energy Secretary Rick Perry’s proposal echoes a June letter from Basin Electric Power Cooperative that called for stand-by product compensation for facilities that can’t come online and offline quickly.
“Federal Energy Regulatory Commission and RTOs (regional transmission organizations) should vary their pricing methodology based on the type of power offered in the market: intermitted, peak or short-term, and baseload,” said Paul Sukut, CEO of Basin, in the letter.
Perry also cited record low temperatures during the polar vortex in 2014 that almost caused blackouts in portions of the U.S.
Opponents of the proposal question how much on-site fuel improves a source’s reliability. They say that as there were gas shortages during the polar vortex, nearly 14 gigawatts of coal capacity also was forced offline, along with 1.4 gigawatts of nuclear energy, the other power source that would benefit from the proposal.
Opponents also said power outages more commonly are caused by damage to power lines.
The coal industry in North Dakota competes mostly with wind energy. The state’s mines are located in the mouths of power plants, making the coal power generated in North Dakota priced more comparably to natural gas plants.
The department is requesting a response to the proposal within 60 days.
Information from: Bismarck Tribune, http://www.bismarcktribune.com