FERC sidelined while energy subsidy fight rages

The nation's grid watchdog has been out of service for nearly a month because of political wrangling in Washington, and already the ripple effects are forcing a faceoff among states, the utility industry and fossil fuel companies over nuclear subsidies.

The Federal Energy Regulatory Commission, or FERC, which regulates the nation's wholesale energy markets, wants to address the subsidy fight. But because it lacks a quorum, until President Trump nominates new commissioners, it is not allowed to do much more than listen to those embroiled in it.

The growing dispute between the power companies and states has much to do with the rapidly changing U.S. electricity grid, where older nuclear power plants are becoming too expensive to operate in an electricity market dominated by low-cost natural gas.

States such as New York and Illinois have created billions of dollars in subsidies to save their nuclear fleets, which is prompting merchant and natural gas utilities, and most recently the oil industry, to cry foul and sue the states for distorting the market.

In the meantime, FERC is being pressed more than ever before to act as a fair arbiter in the fight, which utility officials frame as one that pits the commission-overseen markets against state-imposed subsidy programs.