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FOR IMMEDIATE RELEASE
June 1, 2022 |
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Siding with OPC, FERC Finds NRG Failed to Show $315 Million in Plant Costs Are Lawful
BALTIMORE – The Federal Energy Regulatory Commission this week agreed with the Office of People’s Counsel that an affiliate of energy giant NRG Energy failed to demonstrate that its plan to place more than $315 million in coal plant costs into customer rates complies with federal law. FERC said the utility failed to demonstrate that NRG’s plan met the “just and reasonable” legal standard and that the resulting rates “may be unjust, unreasonable, unduly discriminatory or preferential, or otherwise unlawful.”
FERC’s decision relates to NRG’s recent notification to the regional market operator, called PJM, that effective June 1 (today), it planned to retire its coal plant located in Delaware just across the Maryland border, called Indian River Unit 4. That notification triggered a PJM expedited review as to whether the plant is needed for system reliability. PJM’s determination that the plant is needed for reliability allowed NRG to propose a plan to recover its costs through a FERC-approved “cost-based” rate rather than through the competitive market.
NRG’s proposal would have the coal plant continue operating for five years at a cost to customers of over $315 million, while new transmission facilities costing just $38 million are built to address the reliability issues. OPC filed a lengthy protest challenging the lawfulness of many aspects of NRG’s proposal. The federal agency concluded that OPC raised issues regarding the proposed rate changes that were sufficiently important to be addressed at an evidentiary hearing.
“FERC’s decision vindicates our concerns that NRG’s proposal requires thorough vetting before imposing these extraordinary costs on customers,” said Maryland People’s Counsel David S. Lapp. “NRG promotes itself as a non-utility competitor that takes on the risks of power market competition, but its proposal asks for regulators to approve exorbitant non-market rates for continuing to run its coal plant. We will work to make sure that customers are protected from NRG’s tactics.”
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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