Opposition Grows To DOE Energy Secretary Perry’s Coal & Nuclear Bailout, Manufacturers Claim It Will Kill Jobs

October 24th, 2017 by Joshua S Hill

Opposition continues to grow and solidify against US Department of Energy Secretary Rick Perry’s plan to prop up the country’s coal and nuclear industries by subsidizing their supposed contribution to grid resiliency, with a diverse group of 12 energy industry associations and a large group of manufacturers calling on the Federal Energy Regulatory Commission to ditch the plan.

Earlier this week we reported on a letter filed with the US Federal Energy Regulatory Commission (FERC) by eight former Commissioners opposing a proposal filed by Department of Energy (DOE) Secretary Rick Perry seeking to subsidize the coal and nuclear power industry based on the false assumption that they provide vital grid resiliency and reliability. Secretary Perry’s proposal came hot on the heels of the long-awaited Department of Energy report studying the country’s grid — a report which, without necessarily dismissing renewable energy, nevertheless clearly revealed the DOE’s support for coal and nuclear.

Secretary Perry’s proposal seeking subsidies for the coal and nuclear industries was unsurprisingly met with disappointment and condemnation from across the American electricity industry — as well as concern from two currently-serving FERC Commissioners.

Today, Tuesday the 24th of October, was the deadline for initial comments on Secretary Perry’s proposal, and unsurprisingly the number of groups which have come out against the proposal are both many and varied — as well as surprising.

A diverse group of 12 US energy industry associations representing oil, natural gas, wind, solar, efficiency, and other energy technologies submitted their comments (PDF) to FERC in response to the proposal, urging the Commission not to adopt the proposal which would “provide out-of-market financial support to uneconomical coal and nuclear power plants in the wholesale electricity markets overseen by FERC.” The follow energy industry associations submitted the comments jointly:

Advanced Energy Economy

American Biogas Council

American Council on Renewable Energy

American Petroleum Institute

American Wind Energy Association

Electric Power Supply Association

Electricity Consumers Resource Council

Energy Storage Association

Independent Petroleum Association of America

Interstate Natural Gas Association of America

Natural Gas Supply Association

Solar Energy Industries Association

Specifically, the energy industry associations’ comments state that:

DOE’s request for a rule that provides discriminatory compensation to certain coal and nuclear resources is based on a “justification for the proposed payments – resiliency – [which] is not well defined, nor is it demonstrated to be lacking” in the regions that would be affected by the rule.

The DOE request “fails to provide substantial evidence” for its claim that “RTO/ISO markets do not adequately value fuel security,” and fails to justify its conclusion that “full cost of service payments are therefore needed to prevent ‘early retirement’ of resources with 90 days of on-site fuel supply.”

Rather, “there is substantial evidence showing that electric systems that lack, or are transitioning to lesser reliance on, coal and nuclear resources are nonetheless operated in a manner that is both reliable and resilient,” and that “outages caused by disruptions of fuel supply to generators appear to be virtually nonexistent.”

Therefore, the proposed DOE rule would “prop up uneconomic generation that is unable to compete … and that is not otherwise needed for reliability.”

“Accordingly, the proposed rule has not been shown to be just and reasonable and cannot be adopted by the Commission.”

Separately, the National Resources Defense Council (NRDC) similarly filed their comments with FERC also urging them not to accept the proposal — submitted together with (PDF) Earthjustice, Environmental Defense Fund, Sierra Club, and other organizations. The comments, discussed in full in a blog post published by NRDC Clean Energy Attorney Miles Farmer, among other things, claim that the DOE proposal “has no resiliency or reliability benefits” and that Secretary Perry’s “argument that we need to prop up coal and nuclear power to shore up reliability doesn’t hold water.”

The comments also include new analysis commissioned by the NRDC and Environmental Defense Fund and conducted by the Rhodium Group which similarly confirmed the original argument that there is no “Clear Link” between coal and nuclear and increased electric system reliability. The full analysis can be read here.

Finally, a separate coalition of large industrial users of electricity also urged FERC to “terminate the Department of Energy” proposal “to prop up unprofitable coal and nuclear plants” calling the proposal a “radical departure from the competitive markets” that would subsequently result in a “substantial loss of US manufacturing capacity and jobs.” The group of US manufacturers includes:

Electricity Consumers Resource Council

American Chemistry Council

American Forest & Paper Association

American Iron and Steel Institute

Carolina Utility Customers Association

Connecticut Industrial Energy Consumers

Illinois Industrial Energy Consumers

Indiana Industrial Energy Consumers

Louisiana Energy Users Group

Multiple Intervenors

Texas Industrial Energy Consumers

Wisconsin Industrial Energy Group

“The federal government should not pick winners and losers in the energy markets and must certainly not treat US manufacturing jobs as inferior to the jobs at uneconomic power plants,” the group said in their comments to FERC. “The Proposal would subsidize coal and nuclear generation and their jobs, putting at risk a far larger number of US manufacturing jobs that face considerable pressure from foreign competition.”











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