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Regulators Reject Trump’s Plan To Subsidize Coal And Nuclear Plants

 

 

By Michael Bastasch


January 9, 2018 - The Federal Energy Regulatory Commission (FERC) on Monday unanimously rejected a President Donald Trump administration proposal that would effectively subsidize coal and nuclear power plants facing closure.


FERC said “we are terminating the proceeding” began after Energy Secretary Rick Perry submitted the proposal to keep certain power plants running in September. Perry’s plan focused on grid “resilience,” in particularly during extreme cold events that put stress on the electric grid.


However, FERC officials — four of five are Trump appointees — won’t take action. Perry’s proposal would have compensated power plants that keep 90 days worth of fuel onsite, mostly nuclear and coal plants.


“I appreciate the Commission’s consideration and effort to further assess the marketplace distortions that are putting the long-term resiliency of our electric grid at risk,” Perry said in a statement.


Perry’s office said the recent cold snap highlights the importance of having a diverse, resilient grid. Indeed, constraints on natural gas supplies did cause New England electricity prices to skyrocket, but all-in-all the grid weathered the cold better than the 2014 “polar vortex” event.


“As intended, my proposal initiated a national debate on the resiliency of our electric system. What is not debatable is that a diverse fuel supply, especially with onsite fuel capability, plays an essential role in providing Americans with reliable, resilient and affordable electricity, particularly in times of weather-related stress like we are seeing now,” Perry said. “I look forward to continuing to work with the Commissioners to ensure the integrity of the electric grid.”


Perry’s plan is just the latest among U.S. officials looking to keep aging nuclear power plants open. Currently, there’s a national push to keep nuclear plants, and some coal plants, open in the face of strict regulations and increased competition from natural gas.


New York and Illinois, for example, both put policies in place to subsidize nuclear power. Connecticut put in place a policy to insulate its sole nuclear plant from competition from natural gas.


Perry’s bid for grid resilience ruffled feathers of the natural gas industry, green energy companies and environmentalists that didn’t want to see wholesale electricity markets changed to favor coal and nuclear power. The newfound allies launched a massive PR and lobbying campaign to thwart Perry’s proposal.


Labor unions, on the other hand, supported Perry’s push. Several unions lobbied FERC on the proposal, which would benefit their members.