June 13, 2018 Read More →

Trump bailouts: Higher electricity costs ‘without any corresponding reliability, resilience, or cybersecurity benefits’

New York Times:

When Mr. Trump came into office, he vowed to revive America’s coal mining industry by rolling back Obama-era environmental regulations. But coal keeps getting edged out by cheaper and cleaner alternatives. At least 15.4 gigawatts of coal capacity is set to retire this year, one of the biggest years on record, according to the Institute for Energy Economics and Financial Analysis. And the coal units that are left now operate far less frequently than they used to, replaced by natural gas, wind and solar power.

For many utilities, the decision to abandon coal comes down to simple economics. Xcel Energy, Colorado’s largest electric utility, recently concluded that it could save $213 million by retiring two of its older coal-fired units a decade ahead of schedule and replacing them with a mix of wind, solar, battery storage and natural gas.

“We built a lot of our coal fleet 40 years ago, and it’s costly to maintain,” said Joshua D. Rhodes, an energy expert at the University of Texas Austin. “Many utilities are now finding that there are plenty of lower-cost options.”

If enacted, Mr. Trump’s order is widely expected to benefit companies like FirstEnergy, an Ohio-based utility whose subsidiary declared bankruptcy in April, putting three nuclear plants and two coal plants at risk of closing. FirstEnergy has urged the administration to pursue a rescue plan, as has Robert E. Murray, a major Trump donor and mining executive whose company sells coal to FirstEnergy.

But the proposal has triggered fierce blowback from a broad alliance of other energy companies that would stand to lose market share. The oil and gas industry has joined with wind and solar groups in opposition, calling the idea “unprecedented and misguided” and threatening lawsuits if the proposal goes forward.

The leaked Energy Department memo indicated that the White House may invoke national security and rely on emergency powers that are normally used for short-term crises like hurricanes. The administration has argued that the loss of coal and nuclear plants, which can run around the clock, would make America’s electric grid less reliable. But grid operators themselves have disputed this rationale, arguing that there is no pressing emergency.

An attempt to prop up unprofitable plants could also mean higher prices for consumers. An earlier bailout proposal by Mr. Perry would have cost between $311 million and $11.8 billion per year, according to an estimate by the research firm Energy Innovation. That plan was ultimately rejected by federal regulators, who have been no less critical of the administration’s latest idea.

“This intervention could potentially ‘blow up’ the markets and result in significant rate increases without any corresponding reliability, resilience, or cybersecurity benefits,” warned Robert F.

More: Trump Wants to Bail Out Coal and Nuclear Power. Here’s Why That Will Be Hard.

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