THE DEPARTMENT OF ENERGY’S GRID RESILIENCE PRICING PROPOSAL: A COST ANALYSIS

This research paper by Energy Innovation analyzes the potential costs to electricity customers of a US Department of Energy (DOE) Notice of Proposed Rulemaking (NOPR) that would provide out-of-market subsidies to power plants with a 90-day on-site fuel supply, specifically targeting coal and nuclear facilities.

• The DOE's proposal to subsidize power plants with 90-day on-site fuel supplies could increase annual costs for electricity customers by between $311 million and $10.6 billion, depending on the implementation scenario.
• The financial benefits of the proposed subsidies would be highly concentrated, with over 80% of coal subsidies and nearly 90% of nuclear subsidies going to five or fewer companies.
• Among the regions analyzed, PJM would experience the highest cost increase, potentially reaching $7.3 billion per year, which represents more than 17% of its total 2015 billing costs of $42.63 billion.
• Specific companies are identified as major potential beneficiaries: NRG could see coal subsidy revenues between $40 million and $1.2 billion annually, while Exelon could receive nuclear subsidies ranging from $0.1 billion to $3.6 billion per year.
• The analysis suggests the NOPR is unnecessary for grid reliability, noting that only 0.00007% of outages since 2012 were caused by fuel supply emergencies.
• The proposal could incentivize the return of retired plants, potentially adding two to four gigawatts of coal capacity and resulting in annual capital costs between $113 million and $228 million.

APA

Orvis, R., Goggins, A., Pierpont, B., Wenzel, M., Sanchez, L., & Posner, D. (2017). THE DEPARTMENT OF ENERGY’S GRID RESILIENCE PRICING PROPOSAL: A COST ANALYSIS. Energy Innovation. https://energyinnovation.org/wp-content/uploads/20171021_Resilience-NOPR-Cost-Research-Note-FINAL.pdf

Chicago

Orvis, Robbie, Andrew Goggins, Brendan Pierpont, Maren Wenzel, Laura Sanchez, and David Posner. THE DEPARTMENT OF ENERGY’S GRID RESILIENCE PRICING PROPOSAL: A COST ANALYSIS. Energy Innovation, 2017. https://energyinnovation.org/wp-content/uploads/20171021_Resilience-NOPR-Cost-Research-Note-FINAL.pdf.

Wikipedia

{{cite report |last1=Orvis |first1=Robbie |last2=Goggins |first2=Andrew |last3=Pierpont |first3=Brendan |last4=Wenzel |first4=Maren |last5=Sanchez |first5=Laura |last6=Posner |first6=David |title=THE DEPARTMENT OF ENERGY’S GRID RESILIENCE PRICING PROPOSAL: A COST ANALYSIS |publisher=Energy Innovation |date=October 2017 |url=https://energyinnovation.org/wp-content/uploads/20171021_Resilience-NOPR-Cost-Research-Note-FINAL.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{orvis2017department, author = {Orvis, Robbie and Goggins, Andrew and Pierpont, Brendan and Wenzel, Maren and Sanchez, Laura and Posner, David}, title = {{THE DEPARTMENT OF ENERGY’S GRID RESILIENCE PRICING PROPOSAL: A COST ANALYSIS}}, institution = {Energy Innovation}, year = {2017}, month = oct, url = {https://energyinnovation.org/wp-content/uploads/20171021_Resilience-NOPR-Cost-Research-Note-FINAL.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }