Many see a higher cap as a windfall for nuclear and coal.
Bruce Radford is executive editor of Public Utilities Fortnightly. Contact him at email@example.com.
FERC's new rulemaking proposal would allow generators to tender supply bids higher than $1,000 per megawatt-hour, if it really costs that much to buy fuel to generate power. Some opponents say that may be OK for gas-fired turbines, but it's not needed for nuclear or coal-fired plants.
Many well-known industry groups, such ELCON, ABATE, APPA, and NRECA oppose FERC's proposal. They stress that operating costs approaching the current $1K offer cap occur so rarely, if at all, that it's not smart to design a rule just to accommodate such an unlikely event. Rather, they say it should be enough to reimburse high-cost generators through special out-of-market payments known as uplift, as is done now.