Energy Secretary Rick Perry said a proposed rule to subsidize coal and nuclear plants is “rebalancing the market” to correct for the Obama administration’s support of renewable energy.
They “clearly had their thumb on the scale toward the renewable side,” said Perry, who spoke about his energy policy priorities with Meet the Press moderator Chuck Todd and Axios CEO Jim VandeHei at an event in Washington, D.C. on Thursday.
The DOE’s request to the Federal Energy Regulatory Commission (FERC) would upend decades of energy market policy by guaranteeing cost recovery for power plants with 90 days of fuel supply on-site -- something that only nuclear power, a few hydropower sites, and some larger coal power plants can provide.
“If you can guarantee me that the wind is going to blow tomorrow, if you can guarantee me that the sun’s going to get to the solar panels…then I’ll buy into that. But you can’t,” said Perry.
The notice of public rulemaking, or NOPR, implies that there is a looming threat to grid reliability due to coal and nuclear power plant retirements. Its conclusions are largely based on an incomplete analysis of the 2014 polar vortex, which could have led to blackouts had several coal-fired plants now slated for closure not been available to serve the load.
The move has been widely criticized by clean energy advocates as politically motivated and factually unproven, and has drawn a backlash from major sectors of the energy industry.
“I think this administration is literally trying to bring coal back from the grave,” said Sen. Maria Cantwell (D-Wash.), the ranking Democrat on the Senate Energy and Natural Resource Committee, who also spoke at Thursday’s event.
“The notion that they’re foisting this on us is just beyond the pale. When you say as an administration that you’re going to mandate…that FERC approve projects that charge consumers more is just the most absurd policy,” she said.
While testifying before a House energy subcommittee last month, Perry implied that price increases for consumers are part of “the cost to keep America free.”
Cost estimates of the plan have been growing in recent weeks, from up to $3.8 billion per year according to research firm ICF, to a more recent study from Energy Innovation and the Climate Policy Initiative that projects a price tag of more than $10 billion per year.
The latter report found that nearly 90 percent of the nuclear energy support would go to five companies -- Exelon, Entergy, PSEG, NextEra and FirstEnergy -- while NRG, Dynegy, FirstEnergy, American Electric Power and Talen Energy would receive 80 percent of the coal subsidies.
When questioned about his beliefs on climate change Thursday, Perry echoed his former public comments that "the jury is still out" on how much humans contribute to global warming.
The statement prompted outbursts from two members of the audience who wanted Perry to sign a “clean energy pledge.” One demonstrator shouted, "Why are you against people's health?" before being escorted from the room.
Perry went on to explain that he isn’t against renewable energy, citing increased wind development and reduced emissions in Texas during his time as governor. He also touted the importance of battery storage technology.
“The holy grail of energy may be in a national lab somewhere or in somebody’s garage -- it’s about battery storage. Battery storage changes the world,” he said, comparing its impact on the energy sector to hydraulic fracturing.
He later defended the slow progress of the Trump administration to restore power to Puerto Rico following Hurricane Maria, saying it was “very, very different than any other natural disaster” he has experienced. A report released last week by the economic consulting firm Rhodium Group classified the power outage as the largest blackout in U.S. history, with roughly 75 percent of island’s residents still lacking electricity 36 days after the storm.
Perry doubled down on arguments that the NOPR would protect Americans from the threat of another polar vortex or summer heat wave.
“The result of having this balanced market, from my perspective -- and hopefully the FERC will see it the same way -- is that we have a system in place," he said. "So that if we do have extraordinary events in this country, the lights will come on. We can keep our families warm.”
“I don’t want to have a conversation with a son, or a daughter, or a Texas citizen whose grandmother didn’t have electricity…because we had brownouts or blackouts because we didn’t have capacity,” said Perry.
The NOPR comes out of a DOE grid reliability study, ordered by Perry in April, that many clean energy and environmental groups viewed as a Trojan horse for shifting federal policy away from supporting renewable energy and toward supporting coal and nuclear power plants.
The DOE insisted on a rushed timeline that requires FERC to respond to the NOPR within 60 days, but a final decision by that time seems unlikely considering the doubts expressed by members of the commission. The agency has the option to reject the rule entirely, pass it as written or issue a notice of inquiry to study it further.
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