June 4, 2018 Read More →

White House plan to bail out coal and nuclear will cost consumers

Wall Street Journal:

The Energy Department is proposing a new plan to bail out failing nuclear and coal-fired power plants by forcing grid operators to take the electricity they produce, a move that could upend competitive power markets and raise prices for consumers.

The plan—a draft now under White House review—isn’t the first attempt by President Donald Trump’s administration to help coal and nuclear businesses. Its goal is to stop a wave of plant closings for two years while the Energy Department studies which plants nationwide are critical to ensuring reliable power in case of attack or natural disaster. Administration officials say grid reliability is a national security issue.

A boom in natural gas production and renewable power have lowered prices and forced coal and nuclear competitors out of business, a trend Mr. Trump has promised to slow. He pledged during his presidential campaign to help coal miners in particular, and he received millions of dollars in campaign donations from coal-company executives. In recent months, he has prodded Energy Secretary Rick Perry on several occasions to craft a solution, and did so again in a statement Friday.

“Unfortunately, impending retirements of fuel-secure power facilities are leading to a rapid depletion of a critical part of our nation’s energy mix, and impacting the resilience of our power grid,” Sarah Sanders, the White House press secretary, said in a statement, adding that the president wants Mr. Perry “to prepare immediate steps” in response.

Mr. Trump’s efforts so far have been blocked by the Federal Energy Regulatory Commission and fought by a broad coalition of opponents.

The country’s largest grid operator is also skeptical. “Our analysis…has determined that there is no immediate threat to system reliability,” PJM Interconnection LLC, which runs the power markets in 13 states across the mid-Atlantic and Midwest, said in a statement. “There is no need for any such drastic action.”

More ($): Energy Department Prepares New Plan to Prop Up Nuclear, Coal-Fired Power Plants


S&P Global Market Intelligence ($):

“There is no national emergency justifying the use of these powers,” said Michael Steel, a spokesperson for the Affordable Energy Coalition, a group of organizations including those supporting wind, industrial energy consumers and others. “Independent experts, regional grid operators, and even the government’s own data show that competitive electricity markets keep the lights on and prices affordable.”

The oil industry, through the American Petroleum Institute, joined a broad group of energy industry associations representing energy efficiency and storage, natural gas, solar and wind to condemn efforts to subsidize “failing” coal and nuclear plants.

“Unprecedented government intervention in the energy markets to support high-cost generation will put achieving that vision in jeopardy and hurt customers by taking more money out of their pockets rather than letting people keep more of what they earn — a key priority of this administration,” said Todd Snitchler, American Petroleum Institute’s market development group director.

Other industry groups opposing the administration’s proposed policy included the American Council on Renewable Energy, the American Wind Energy Association, the Natural Gas Supply Association and the Solar Energy Industries Association.

PJM, which operates a regional transmission organization near abundant coal resources, said in a statement following the release of the DOE plan that there was “no need for such a drastic action.”

“Any federal intervention in the market to order customers to buy electricity from specific power plants would be damaging to the markets and therefore costly to consumers.”

The Union of Concerned Scientists called the proposal an attempt to “fleece ratepayers” by doling out billions of dollars in guaranteed profits to coal and nuclear plants. The Sierra Club said coal and nuclear plants will continue to retire even though the administration is pushing “illegal directives [that] will be met with fierce resistance in the courts and in the streets.”

More ($): Much of US energy industry recoils at Trump plan to prop up at-risk power plants

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