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FERC Throws Wrench Into Trump’s Pro-Coal Plan

The Federal Energy Regulatory Commission does not see any emergency in the U.S. electricity market, the panel regulating the national grid said at a Senate hearing. The opinion is likely to undermine efforts by the Trump administration to save non-competitive coal and nuclear power plants on the grounds that they guarantee the grid’s resilience in case of emergency.

Reuters reported the chairman of the five-member panel and one member stated they saw “no immediate calamity or threat” to the national grid, and one other member responded to a question about whether she saw any risks to the grid’s resilience with “no.” The rest of the panel’s members refrained from expressing an opinion during the hearing.

One Republican member of the panel noted, however, that although the grid is currently reliable, FERC must watch it closely to make sure the switch from coal and nuclear to natural gas and renewables does not affect negatively its capacity of coping with extreme weather effects, and physical and cyber attacks.

Other members of the panel, Republicans and Democrats alike, noted that subsidies for coal and nuclear power plants would inevitably swell consumer’s electricity bills. “The question is how much,” said Democrat panelist Richard Glick.

Related: Oil Prices Rebound On Crude, Gasoline Inventory Draws

Last year, Energy Secretary Rick Perry proposed a plan for subsidizing coal and nuclear plants for providing base load generation—that is, round-the-clock power, but the plan was rejected by the utility regulators who said they will study the national grid’s resilience to supply interruptions. Many grid operators said they are already factoring in everything that has to do with their grid’s resilience to disruptions.

Meanwhile, coal and nuclear plants are shutting down as they can no longer compete with cheap natural gas and can barely compete with subsidized renewables. Two months ago, utility FirstEnergy approached the Department of Energy directly with a request for what would have been a bailout package for its coal and nuclear subsidiaries, but just days after this, the parent announced the bankruptcy of the two units. More plant closures are expected this year in the absence of government intervention.

By Irina Slav for Oilprice.com

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