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Critics: Proposed energy rule is coal industry payback for supporting Trump
WASHINGTON – A proposal by the Trump administration to guarantee the nation has a sufficient supply of power in extreme weather conditions or other emergencies is under fire from clean energy advocates who see it as a blatant attempt to prop up the struggling coal industry.
“This is an unprecedented effort to intervene in the electricity marketplace and provide a new subsidy, which ratepayers will foot the bill for, to coal and nuclear power facilities,” said Greg Wetstone, president and chief executive officer of the American Council On Renewable Energy.
If the proposal is approved, critics warn, consumers can expect to pay higher electricity bills for their homes and businesses, although exactly how much more is not yet certain.
“It’s a clumsy and anti-competitive proposal to charge customers more for dirty power plants that they neither want nor need,” said Mark Kresowik, deputy regional director for the Sierra Club’s Beyond Coal Campaign.
The proposal, submitted by Energy Secretary Rick Perry in late September, calls for the Federal Energy Regulatory Commission to adopt new regulations to ensure that coal and nuclear plants are fully compensated for the “reliability and resiliency” they contribute to the nation’s power grid.
Perry argues the new regulations are needed because the nation’s electricity grid is threatened by the premature retirements of power plants that can withstand major fuel supply disruptions caused by natural or manmade disasters.
In a letter to energy regulators, Perry cites the Polar Vortex cold wave in 2014 and recent hurricanes that devastated parts of Texas, Florida and Puerto Rico as examples of why the nation’s fuel supply must be protected.
Wholesale pricing does not reflect “the reliability and resiliency benefits provided by traditional baseload resources, such as coal and nuclear,” Perry wrote. The proposed regulations would allow them to recover “fully allocated costs and thereby continue to provide the energy security on which our nation relies,” he said.
Coal and nuclear energy groups see Perry’s recognition of their value to the power grid as a welcome change from the administration of former President Barack Obama.
“We’ve had eight years of the federal government, through regulation, trying to drive us out of business,” said Luke Popovich, a spokesman for the National Mining Association. “We now have an administration that at least wants to reset this balance and try to lift us up.”
Nuclear power plants are incredibly important to the electric grid, providing power around the clock and performing particularly well during extreme weather events like the Polar Vortex, said Matt Crozat, a senior policy director at the Nuclear Energy Institute.
Crozat praised Perry for moving quickly to resolve what he said has been a longstanding problem of nuclear plants not being adequately compensated for the value they bring to the grid.
“What I see from the administration is an attempt to move forward,” he said. “Rather than talk about these issues, we’re actually going to try to address them.”
But clean energy groups see Perry’s move as payback to the ailing coal industry for its support of President Trump during last year’s election.
By giving an advantage to coal and nuclear, they argue, the new regulations would interfere with competition and could reduce the reliance on cheaper, cleaner forms of energy, such as wind, solar and natural gas.
“I think the real agenda here is trying to find ways to prop up non-competitive coal and nuclear plants, and that I don’t think should be done through some arbitrary rulemaking,” said Stephen Smith, executive director of the Southern Alliance for Clean Energy.
A broad array of groups representing fossil fuel and renewable energy interests has formed an unusual alliance to fight the proposed rule. Eleven organizations filed a motion last week requesting that the Federal Energy Regulatory Commission, which is an independent agency, delay a decision on the proposal.
Perry asked the agency to give the public 45 days to comment on the proposed rule. The agency’s board then would have 15 days to decide whether to enact the new regulations. But the opponents argued in their motion that, because the new rules would have such significant ramifications, more time is needed for public input.
What’s more, critics argue, there is no evidence that the nation is in danger of facing a power shortage in the event of floods, extreme cold or other emergencies. They point to an Energy Department study released in August that concluded that grid reliability is adequate today.
“I think (Perry) is creating a fix for a problem that I’m not sure actually exists,” Smith said.
But Popovich of the National Mining Association said it would be a mistake not to act simply because there is no immediate crisis.
“There’s no crisis with climate change today either, but there are people who are saying the responsible approach is to take action now to prevent a crisis,” he said. “That is exactly the same logic we’re using here. Let’s take action now so we don’t have a crisis.”
Lower-for-longer oil prices and the advance of renewable energy and electric vehicles have made Big Oil plan for a gradual shift toward natural gas in their production portfolios.