Tuesday, January 09, 2018

Regulators reject plan to help coal and nuclear power plants

"In an order Monday, the Federal Energy Regulatory Commission rejected U.S. Energy Secretary Rick Perry’s sweeping proposal to subsidize struggling coal and nuclear plants in the name of keeping power grids dependable. Instead, the commission asked grid operators to suggest their own ideas to make the system more resilient," Catherine Traywick and Ari Natter report for Bloomberg.

It's a surprising unanimous vote from an agency in which four of the five commissioners were appointed by President Trump, and three of them are Republicans. In the order, the regulators said they appreciated Perry's efforts to reinforce the resilience of the power grid and said it's "an important issue that warrants further attention."

Perry's plan proposed to raise electricity prices paid to any power plant that has a 90-day fuel supply on hand. That would benefit coal, especially coal magnate Robert Murray's plants, since natural gas and renewable energy are more expensive to store.

U.S. Energy Information Administration graph; click here for the interactive version

The natural gas industry criticized the plan, saying it would undermine competition in wholesale power markets. Natural gas now makes up the largest part of the nation's energy mix, and coal is unlikely to catch up.

FERC's order "gave regional grid operators 60 days to submit feedback on how grid resilience should be assessed, if at all, and whether the commission should take any action on the matter at this time," Bloomberg reports.

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