June 8, 2018 Read More →

DOE: No cost estimate for proposed coal, nuclear bailout

RTO Insider:

A senior Department of Energy official told Congress on Thursday his agency has no estimates on the cost of the coal and nuclear power bailout President Trump ordered last week, as Democrats blasted the proposal.

Trump directed Energy Secretary Rick Perry last Friday to force grid operators to provide a lifeline to struggling coal and nuclear plants, saying their retirements threaten national security. Trump’s directive came after the leak of a 40-page draft DOE memorandum that cited the Defense Production Act of 1950 and Section 202c of the Federal Power Act, which allows the energy secretary to issue emergency orders during energy shortages. The memo proposed creation of a “Strategic Electric Generation Reserve (SEGR) to promote the national defense and maximize domestic energy supplies.”

Rep. Don Beyer (D-Va.) confronted DOE Assistant Secretary Bruce J. Walker over the directive at a hearing of the House Committee on Science, Space, and Technology’s Subcommittee on Energy on Thursday. Walker, head of the Office of Electricity Delivery and Energy Reliability, responded tersely.

Beyer quoted the president of the Electricity Consumers Resource Council (ELCON), who said the DOE memo’s proposed requirement that RTOs purchase capacity and energy from at-risk plants would “devastate” U.S. manufacturing. “Have you calculated the costs on American business, specifically American manufacturing?” Beyer asked.

Walker: “I have not.”

Beyer then cited ELCON’s estimate that DOE’s earlier Notice of Proposed Rulemaking to provide cost-of-service payments to plants with on-site fuel — made under Section 403 of the Department of Energy Organization Act — would cost $8 billion annually in PJM alone. “Now the new plan nationalizes the 403 proposal, so I would expect that $8 billion is going to go up very significantly,” Beyer said. “In putting together this draft plan have you estimated what this will cost the U.S. taxpayer?”

Walker: “I have not.”

“I have to give you wonderful credit for being able to answer these things very, very tightly,” Beyer responded. “I would suggest though … this is something that you and Secretary Perry and others look very seriously at and should have numbers available for. I think it’s within my purview as a member of this committee to ask you to go back and do the elementary research and report back to the committee on those two things please.”

More: Dems hit coal, nuke bailout at House hearing

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