Coal, nuclear plants won’t get subsidies

Federal regulators on Monday rejected a proposal by Energy Secretary Rick Perry to subsidize struggling coal and nuclear plants, a blow to the Trump administration’s efforts to revive America’s declining coal industry.

Over the past decade, an influx of cheap natural gas and the rapid rise of renewable energy has transformed the nation’s power sector, driving down electricity prices and pushing many older coal and nuclear plants into retirement.

In September, Perry warned that the loss of these plants could threaten the “reliability and resilience of our nation’s grid” and asked the Federal Energy Regulatory Commission, which oversees regional electricity markets, to guarantee extra compensation to any power plants that could stockpile at least 90 days’ worth of fuel on-site — which, in effect, meant subsidizing coal and nuclear plants. (Natural gas plants are usually fed by pipeline and would not qualify.)

While a few power companies with significant coal and nuclear capacity supported the idea, Perry’s proposal generated a fierce backlash from a coalition of utilities, electricity consumers and former regulators.

Critics said Perry’s proposal would upend competition in the electricity markets, and they pointed out that blackouts usually occurred because of problems to transmission lines, not because power plants had insufficient fuel on site.

The FERC largely sided with the critics, although it did say it would conduct its own investigation into the resiliency of the nation’s power system, asking grid operators for their ideas. Four of the five members of the panel were nominated by President Donald Trump.

“There is no evidence in the record to suggest that temporarily delaying the retirement of uncompetitive coal and nuclear generators would meaningfully improve the resilience of the grid,” the agency said.