Perry in bind as Trump demands that he betray his values
Pity Rick Perry. His boss demands not only his loyalty but his soul.
The former Texas governor built his political career on the slogan “Texas, open for business.” His conservative philosophy was simple: Wipe away regulations, lower taxes and promote free enterprise.
Then he accepted President Donald Trump’s offer to serve as secretary of energy.
Perry is struggling to find a plausible excuse to reward Trump’s coal-industry donors and supporters by blowing up the nation’s competitive electricity markets, which have made U.S. electricity bills the envy of the world.
The fact that Perry oversaw the groundbreaking privatization of the Texas electricity market makes his recent work especially galling. One might expect our former governor to cite his experience, defend free enterprise, encourage privatesector solutions and denounce
government interference. Not this time.
Trump promised to save and grow the coal and nuclear power industries even though neither is competitive in the age of cheap natural gas and renewable energy. So he’s ordered Perry to devise a scheme to force private electric companies to buy expensive electricity from privately owned nuclear and coal-fired power plants.
For over a year, Perry has floundered in justifying this unprecedented government intervention. In April 2017, he asked experts at the Department of Energy to assess whether increased reliance on gas and renewables would endanger the power supply. They concluded no, it doesn’t.
Last fall, he proposed a rule to the Federal Energy Regulatory Commission requiring the use of coal-fired and nuclear power to guarantee resilience. The Republican majority rejected his reasoning, siding instead with the 95 percent of electric companies and grid operators who said it was unnecessary.
According to a memo obtained last month by Bloomberg News, Perry’s new plan is to declare a national emergency under the Federal Power Act and the Defense Production Act. He says we can’t rely on natural gas power plants because pipelines are too vulnerable to cyberattack.
Therefore, subsidies for nuclear and coal-fired power plants are necessary because they keep weeks of fuel on site, Perry argued. His hyperbole fails even basic analysis.
Whether it’s snowstorms, heat waves, hurricanes or cyberattacks, the most vulnerable links in the power grids are transmission lines.
Yet, the Energy Department has not declared an emergency to fortify them.
When confronted with his faulty reasoning, Perry falls back on the last refuge of scoundrels: patriotism.
“You cannot put a dollar figure on the cost to keep America free, to keep the lights on,” Perry told the World Gas Conference.
Trump-appointed FERC Chairman Kevin McIntyre is not buying it.
“There is no immediate calamity or threat of the ongoing ability of the bulk power system to operate and serve needs,” he said.
Perry needs FERC commissioners to sign off on this plan because it picks financial winners and losers, said Rabeha Kamaluddin, a partner at the law firm Dorsey & Whitney who represents clients at FERC. There is no precedent or evidence to support Perry’s plan.
“Then you have the practical business and market perspective,” she said. “These are uneconomic plants, and we need to shut them down. You have coal operators who are saying, ‘No, don’t save us … the economics don’t justify us keeping these open.’ ”
The American Petroleum Institute called Perry’s proposal “unprecedented and misguided.” The Electricity Consumers Resources Council warned it “is unnecessary, anticompetitive and would increase the price of electricity to businesses and consumers, resulting in a substantial loss of U.S. manufacturing capacity jobs.”
Perry’s plan will take $16.7 billion a year from consumers and redistribute it to Trump’s coal and nuclear industry allies, according to The Brattle Group, the energy industry’s foremost consultants.
While the proposal would save 790 coal-related jobs, according to the nonpartisan think tank Resources for the Future, the coal plant emissions would cause 353 to 815 premature deaths in 2019-2020.
None of this criticism is quenching Trump’s desire to throw a bone to coal mining CEO Robert Murray at Murray Energy, or electric company CEO Charles Jones of FirstEnergy, Trump buddies who are pushing hard for the rule. Perry’s 2016 presidential campaign manager, Jeff Miller, is FirstEnergy’s top lobbyist.
Most Texas electric customers won’t pay more under Perry’s plan because most of the Texas grid is outside federal oversight. But Texas natural gas producers will feel the pinch when Perry orders grid operators to buy from coal and nuclear power plants instead of gasfired.
Lower gas consumption will only exacerbate the low prices that have hurt Texas natural gas producers in recent years. It’s like Perry’s forgotten from where he came.
Perry knows better than to pick winners and losers in a competitive market. He needs to stand up for his Texas values and drop this sham before it hurts consumers and Texas businesses.