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FirstEnergy Issues Emergency Order to Save Nuclear Power Plants

FirstEnergy recently announced their intent to shut down their Beaver Valley, Davis-Besse and Perry nuclear power plants, and followed that announcement with a Chapter 11 bankruptcy filing.

Before the filing, FirstEnergy also asked Secretary of Energy Rick Perry to issue an emergency order to the regional power grid operator, PJM Interconnection, to negotiate a contract that would adequately compensate coal and nuclear plant owners "for the full benefits they provide to energy markets and the public at large, including fuel security and diversity."

The power to issue such an emergency order comes from a rarely used clause in the Federal Power Act authorizing the DOE to take extraordinary action to keep power plants running -- and the grid stable -- during extreme emergencies such as an act of war. FirstEnergy argues that closing its power plants constitutes a developing emergency because it lowers grid reliability and could lead to power shortages at some point in the future.

An emergency order would effectively compel PJM to dispatch electricity from FirstEnergy's coal and nuclear plants before any others. These emergency orders have only been used eight times since 2000, largely in response to natural disasters or blackouts.

The Department of Energy stated that it received FirstEnergy's request and will go through its standard review process. It did not comment further. PJM said such a request, if granted, would effectively circumvent FERC, putting it in "uncharted waters." In January, FERC denied Perry's request to begin a rulemaking that would re-evaluate compensation for plants with a 90-day on-site fuel supply, such as FirstEnergy's coal and nuclear plants. However, there are still opportunities for the Ohio State legislature to enact a policy fix.

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