Amid its clear penchant for ignoring the facts and scientific analysis to promote a political agenda, the Trump administration’s decision to force American consumers to bail out uncompetitive coal-fired and nuclear power plants should come as no surprise. However, the destabilizing consequences and fact-free nature of the proposal are truly stunning.
In the recent notice of proposed rulemaking (NOPR) from the Department of Energy, Secretary Rick Perry is directing federal regulators at the Federal Energy Regulatory Commission (FERC) to act within 60 days to create rules that would favor coal and nuclear plants that are no longer the most cost-effective producers of energy. Let’s just call this what it is: a blatant overreach and crude attempt to force American consumers to pay for promises President Trump made on the campaign trail. I am calling on Secretary Perry to withdraw the proposed rule from FERC’s consideration immediately.
Our nation’s electric grid has changed significantly, and energy markets have evolved over the last decades. Our grid is now a multi-directional and distributed system, where consumers are increasingly also producers, electrons are flowing in multiple directions, and diverse energy sources make us less dependent on large central generating plants. Consumers are driving utilities and power providers to seek cheaper and cleaner power sources. Natural gas and renewable energy have replaced traditional energy sources like coal as the most reliable and cost-effective fuels, and advanced energy storage and demand-response systems have made the grid more resilient and adaptive to stress.
If FERC were to adopt Secretary Perry’s proposed rule, or anything even remotely similar, it would unravel wholesale energy markets and take us back 20 years to the days when utilities commanded highly regulated energy markets rather than consumers. Artificially subsidizing coal and nuclear plants will increase energy costs and leave average American households and businesses paying higher electric bills. You don’t have to take my word for it. Former FERC Chairman Jon Wellinghoff, who was appointed to the commission by President George W. Bush, has said the proposed rule “would blow the market up.”
Secretary Perry claims that propping up outdated coal and nuclear generation plants is urgently necessary to keep our nation’s electric grid reliable and resilient to disasters because these plants are able to stockpile extra fuel. That could not be further from the truth. In fact, that rationale directly contradicts a recent Department of Energy report that found that the grid is already very reliable and that power plants with large supplies of extra fuel do little to nothing to help improve reliability.
During recent major disasters and power outages in the United States, the very coal and nuclear plants the Trump administration is trying to subsidize failed to perform. Low winter temperatures during the 2014 polar vortex in the Northeast forced coal and nuclear plants offline due to low temperatures and frozen fuel. Demand-response systems (which manage supply and demand on the grid efficiently) and wind power helped offset the lost energy and prevented massive power outages.
This year, after both Hurricanes Harvey and Irma, coal and nuclear plants in Texas and Florida had to be evacuated, and large piles of coal were too heavy to transport to boilers because they were so soaked. The primary cause of Puerto Rico’s widespread power outages after Hurricane Maria was extensive damage to power lines and outdated power plants that were struggling even before the storm.
We already know that the best way to improve resilience and reliability for our nation’s energy delivery infrastructure is by modernizing transmission and distribution lines, including building more microgrids, improving cybersecurity, and incorporating a diversity of energy sources, energy storage, demand response, and more generation points into the grid.
Secretary Perry and the Trump administration can repeal environmental rules, but they can’t repeal economics. Let’s stop picking winners and losers and making policies based on nostalgia for the grid of the past. Instead, we need to invest in clean, efficient and affordable technologies and fuels that will meet our future energy needs and power strong economic growth.