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

The research note analyzes four implementation scenarios for the DOE's Grid Resilience Notice of Proposed Rulemaking (NOPR), which would compensate coal and nuclear plants for costs not recovered in wholesale markets. The analysis finds that annual customer costs could range from $311 million to $10.6 billion, with a high concentration of benefits accruing to a small number of companies, particularly in the PJM region.

• Depending on the implementation scenario, the DOE's proposal could increase annual costs for electricity customers by between $311 million and $10.6 billion.
• The financial benefits of the proposed subsidies are highly concentrated, with over 80% of coal subsidies and nearly 90% of nuclear subsidies going to five or fewer companies.
• PJM is identified as the region that would experience the highest cost increases, potentially reaching $7.3 billion per year, which represents more than 17% of its total 2015 billing costs.
• Specific companies stand to gain significantly: NRG could see annual revenue increases between $40 million and $1.2 billion for coal units, while Exelon could see increases from $0.1 billion to $3.6 billion for nuclear units.
• The analysis considers four 'readings' of the NOPR: Reading 1 (uplift for cash flow negative units), Reading 2 (recovery of capital and fixed O&M after market revenue), Reading 3 (recovery of uncompensated capital and fixed O&M in addition to market revenue), and Reading 4 (Reading 3 plus uneconomic dispatch costs).

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} }