In August, the U.S. Department of Energy released his highly anticipated grid study, finding cheap natural gas to be the main driver behind baseload power plant retirements. This was very obviously, not good news for coal-fired and nuclear power plants.
The study did not find a clear link between retiring coal and nuclear power plants and reduced electrical grid reliability, either. However, the DOE is asking federal regulators to “assume” this may be the case and create a rule to “ensure that certain reliability and resilience attributes of electric generation resources are fully valued.”
In his letter to the Federal Energy Regulatory Commission (FERC)and a notice of proposed rulemaking (NOPR), the agency asks that action be taken within 60 days that would financially prop up “fuel-secure resources,” which must have “a 90-day fuel supply on-site enabling [them] to operate during an emergency, extreme weather conditions, or a natural or man-made disaster.”
Because of the expense of operating many coal-fired and nuclear power plants, they have trouble competing in the wholesale electricity market. This means Perry’s proposal is essentially guaranteeing them profits and giving them federal protection from competitive market forces. In other words, the government will be subsidizing them.
No time for any discussion of proposed rules
In the past, any FERC actions would have meant discussions were held through a stakeholder process, where utilities, grid operators, states, renewable energy and environmental groups, consumer advocates and other parties would have a chance to participate.
In the NOPR, Rick Perry wrote this specific action be followed: “The secretary is requiring the commission to take final action on the proposed rule within 60 days from the date of publication of this NOPR in the Federal Register. As an alternative, the secretary urges the commission to issue the rule proposed herein as an interim final rule, effective immediately, with provision for later modifications after consideration of public comments.”
The bottom line — customers across the country will ultimately foot the bill for supporting these more expensive plants. It is patently stupid to assume that coal-fired power plants will do the same job that natural gas power plants are doing now and at a cheaper cost. Coal is not only a dirty energy source, but it is expensive. As for nuclear power, the government needs to continue supporting research into smaller modular power plants.
