Rejection of subsidies for coal and nuclear power is a win for fact-based policymaking
Perry’s proposal assumed that storing extra fuel on-site at generating plants would make the grid more resilient against disasters that could interrupt fuel deliveries. But resilience is not just a matter of having fuel close at hand.
Recognizing this, FERC’s order included a new study of the resilience of the “bulk power system” – the part of the electric grid that includes generation and transmission facilities, which are interconnected across regions. If this system is disrupted in any way, the impacts can be felt across wide areas.
The commission directed operators that manage regional power networks across the nation to submit information within 60 days on the resilience of the system, and to advise on whether FERC needs to take additional actions to improve it. This approach makes clear that the FERC commissioners want more evidence before they make any calls for actions such as subsidizing marginal fuel supplies.
Look at the evidence
Whether FERC commissioners know it or not, their approach follows many recommendations set forth recently by a national Commission on Evidence-Based Policymaking. This panel was created in 2016 through legislation co-sponsored by House Speaker Paul Ryan and Senator Patty Murray of Washington. Its task was to examine how federal agencies use data, research and evaluation to build evidence, and to strengthen those efforts in order to make better policies.
“You always hear people in Washington talk about how much money was spent on a program, but you rarely hear whether it actually worked. That has to change,” Ryan said, when the commission was established. “This panel will give us the tools to make better decisions and achieve better results.”
In its final report issued on 7 September 2017, the commission noted the importance of securing and making accessible data which can be used for effective policymaking. To most casual observers, this may seem straightforward. Why would you want to change a policy, which could affect many consumers and businesses, without first looking at the data and understanding all of the potential impacts of a change?
In reality, data can be disputed (think “fake” data), and policies can be motivated by political ideology. Policy choices could become detached from the evidence and fail to incorporate the pros and cons or seek consensus.
In this case, however, FERC’s 5-0 decision shows that the commissioners agreed on their course, and it appears that policymaking based on evidence won the day. This decision had the potential to affect millions of electricity customers, as well as power markets and the environment. FERC deserves congratulations for putting evidence before action.
Ellen Hughes-Cromwick is Senior Economist and Interim Associate Director of Social Science and Policy, University of Michigan Energy Institute, University of Michigan. This article is published courtesy of The Conversation (under Creative Commons-Attribution / No derivative).
