Perry orders FERC to implement subsidies for coal and nuclear plants

“Secretary Perry Urges FERC to Take Swift Action to Address Threats to Grid Resiliency” screams the 23-point headline for the press release on the Department of Energy website.

Well, that’s one way to describe it. Another way would be that Rick Perry is asking the Federal Energy Regulatory Commission (FERC) to push through a rule that would bail out nuclear and coal plants, despite the overwhelming desire by utilities to shutter these expensive, inefficient plants.

Same-same.

In a letter to the commission dated today, Perry asks FERC to approve a rule, on an expedited schedule, that would allow utilities to recover the fully allocated costs for traditional “baseload resources” like coal and nuclear plants because, in his words, they provide “the energy security on which our nation relies”.

Perry’s letter also frequently references what he refers to as the “premature retirement” of coal and nuclear plants, a characterization that must come as something of a surprise to the utilities, many of whom have actually discussed (as pv magazine has previously reported) accelerating the pace of coal-plant closures, citing their inefficiency and desire to move to cleaner forms of electricity generation.

Notably absent from the request was any mention of what such payouts will cost and who would pay for them.

Graham Richard, CEO of Advanced Energy Economy, a national business group, said in a statement that the proposed rule ignores the primary finding from Secretary Perry’s own grid study from just a month ago, which was that the grid is being managed reliably with today’s diverse energy resource.

“Simply put, this proposed rule has something for everyone to dislike,” Richard said. “If you’re a believer in competition and free markets, this rule would insert the federal government squarely into the middle of market decisions. If you are driven by keeping energy costs low, this rule would impose higher energy costs on consumers for no tangible benefit by forcing electricity customers to pay to keep uneconomic power plants in operation.”

“Finally, if you are driven by innovation and technology, this rule purposefully puts a thumb on the scale for existing, century-old technology at the expense of modern advanced energy that is currently winning based on price and performance,” Richard added.

Perry’s entire argument in favor of the rule revolves around the argument that must-run “baseload” plants are necessary for electric system reliability, a myth that has been repeatedly disproven. While baseload generation may make things easier for grid operators, it is simply not necessary.

Given the pro-coal ideologues that President Trump has appointed to FERC, the body is likely to approve Perry’s request. In August, FERC’s “interim” chairman signaled his willingness to do support the nuclear and coal industries.