WASHINGTON — The Trump administration says coal is back and nuclear energy is cool. Not at the expense of natural gas, wind and solar, insists an unusual coalition of business and environmental groups.
Dow Chemical, Koch Industries and U.S. Steel Corp. are standing with environmentalists in opposing an Energy Department plan that would reward nuclear and coal-fired power plants for adding reliability to the nation’s power grid and are pressuring the administration to shift course.
Energy Secretary Rick Perry says the plan is needed to help prevent widespread outages such as those caused by Hurricanes Harvey, Irma and Maria and a 2014 “polar vortex” in the Eastern and Central U.S. The plan aims to reverse a steady tide of retirements of coal and nuclear plants, which have lost market share as natural gas and renewable energy flourish.
“The continued loss of baseload generation … such as coal and nuclear must be stopped,” Perry wrote in a Sept. 28 letter urging the Federal Energy Regulatory Commission to adopt the new rule. “These generation resources are necessary to maintain the resiliency of the electric grid” amid sharp shifts in the U.S. energy market.
Perry’s plan coincides with President Donald Trump’s vow to achieve U.S. “energy dominance” while ending what he and other Republicans call a “war on coal” waged by the Obama administration. Perry, who has said he wants to “make nuclear energy cool again,” is certain to face questions about the plan and the opposition at a congressional hearing on Thursday.
The plan would compensate power plant owners that maintain a 90-day fuel supply protected against the elements. Critics say it could result in subsidies worth billions of dollars.
Environmental groups say the plan would boost dirty fuels and harm consumers, while the energy industry warns about interference in the free market and manufacturers complain about higher energy prices that could be passed on to consumers.
“Rick Perry is trying to slam through an outrageous bailout of the coal and nuclear industries on the backs of American consumers,” said Kit Kennedy, an energy policy expert for the Natural Resources Defense Council. “This radical proposal would lead to higher energy bills for consumers and businesses, as well as dirtier air and increased health problems.”
A coalition of industry groups, ranging from the American Council on Renewable Energy to the American Petroleum Institute and the Natural Gas Supply Association, also blasted the plan, saying it could harm “entire industries and their tens of thousands workers.”
Amy Farrell, senior vice president of the American Wind Energy Association, said the proposal could “upend competitive markets that save consumers billions of dollars a year.”
Marty Durbin, executive vice president of the petroleum institute, the top lobbying group for the oil and gas industry, said officials “need to be careful that government doesn’t put its thumb on the scale” in energy markets. “It’s better to let markets choose, which is what the United States is seeing with the growth of natural gas” as the leading U.S. electricity source, Durbin said.
The Industrial Energy Consumers of America, a trade group that represents Dow, Koch Industries and other manufacturing giants, is among those lobbying against the plan. In a letter to Congress, the group called the proposal “anti-competitive” and said it could distort or “destroy competitive wholesale electricity markets, increase the price of electricity to all consumers” and harm U.S. manufacturing.
The manufacturers and other critics say there is no evidence of a threat to the grid’s day-to-day reliability that would justify the emergency action Perry is seeking.
Indeed, in a report commissioned by Perry and delivered in August, the Energy Department said “reliability is adequate today despite the retirement of 11 percent of the generating capacity available in 2002, as significant additions from natural gas, wind, and solar have come online since then.”
Gerry Cauley, CEO of the North American Electric Reliability Corp., an international regulatory authority, said at a conference in June that “the state of reliability in North America remains strong, and the trend line shows continuing improvement year over year.”
Even so, coal and nuclear groups hailed the plan. National Mining Association President and CEO Hal Quinn called Perry’s action “a long-overdue and necessary step to address the vulnerability of America’s energy grid,” while Maria Korsnick, president and CEO of the Nuclear Energy Institute, said disruptions caused by hurricanes and other extreme weather events show that “the urgency to act in support of the resiliency of the electric grid has never been clearer.”
The Energy Department seeks final action by mid-December, although industry groups and some members of Congress have pushed for a delay.
Sen. Maria Cantwell, D-Wash., said the energy commission should reject Perry’s plan. “Secretary Perry has embraced an obsolete view of the grid (that) would bail out coal and nuclear power plants at the expense everyone else,” she said.
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