In a major setback
Panel not persuaded by arguments that targeted renewables
to President Donald Trump’s energy agenda and his promise to revive the coal industry, his plan to force utilities to buy more coal and nuclear power was rejected.
WASHINGTON — A Trump administration plan to force utilities to purchase more coal and nuclear power was rejected Monday by federal regulators, undermining the president’s energy agenda and his promise to revive the coal industry.
The five-member Federal Energy Regulatory Commission, which is dominated by Trump appointees, unanimously rejected the proposal. Its members were not persuaded by arguments from Energy Secretary Rick Perry that solar, wind and other forms of renewable power were destabilizing the nation’s power grid and needed to be backstopped with more coal and nuclear power at a considerable cost to consumers.
The contentious plan to prop up the coal and nuclear markets has been atop Perry’s agenda for months. The secretary had warned the proliferation of what he characterizes as less reliable renewables is undermining national security by destabilizing the grid. The market forces that are precipitating the closure of coal and nuclear plants, Perry argued to the commission, needed to be confronted with government intervention that would keep the fossil fuel plants online.
But the commission reached the same conclusion as many independent energy experts who reviewed the Trump administration proposal, finding no justification for what could amount to multi-billion dollar price supports for the struggling coal and nuclear industries. The commissioners wrote in their decision that the considerable evidence provided by grid operators does “not point to any past or planned generator retirements that may be a threat to grid resilience.”
They concluded that Perry’s plan to force ratepayers to pay coal and nuclear generators a premium for their energy to keep them from closing would amount to the government unjustifiably choosing winners and losers in the marketplace. “The record … does not demonstrate that such an outcome would be just and reasonable,” the commission decision said.
While the commission has vowed to continue studying the grid resiliency issues Perry raised, its action underscores the challenge the Trump administration faces in its bid to revive struggling sectors of the U.S. energy economy. Perry’s proposal laid out in stark relief the lengths the federal government would have to go to keep coal competitive.
While Trump had long argued that coal would flourish in the absence of Obama-era climate action and other environmental regulations, the Department of Energy plan was an acknowledgment that propping up the industry would require its own extraordinary government intervention, and come at a hefty taxpayer cost.
The lone Democrat Trump appointed to the commission, Richard Glick, characterized the proposal as a “multi-billion dollar bailout targeted at coal and nuclear.”
There was irony in Perry’s approach, as the secretary has longed railed against government supports for renewable energy.
The Perry proposal had little support outside of the industries that would have benefited. Even the American Petroleum Institute, usually a reliable Perry ally, opposed it. The blueprint was met with deep skepticism by independent energy experts, who had warned it would impede economic growth and distort the power market. Environmentalists and green energy advocates fought it bitterly.