Opinion

Rick Perry’s coal bailout gets swatted into the stands

How terrible was Energy Secretary Rick Perry’s proposed bailout for the coal industry?

So terrible the Federal Energy Regulatory Commission unanimously rejected it. No small feat since the five-member commission includes four appointees from President Donald Trump, three of them Republicans.

This administration has been unreasonably and unabashedly pro-coal, ignoring environmental consequences and market forces. The reality of those market forces — natural gas is cheaper than coal, and will be for years to come — is what squashed Perry’s misbegotten proposal.

Perry had sought to prop up coal and nuclear power plants that are struggling to compete in the marketplace with cheap natural gas and renewable energy sources. His plan would have guaranteed financial payments to coal and nuclear plants that maintain 90 days of fuel supplies on-site. This doesn’t happen with natural gas and renewable energy plants.

Ratepayers would have picked up the increased cost, estimated in the billions. The largest beneficiary of the proposed rule would have been the coal mining company Murray Energy, whose CEO Robert Murray is a big Trump supporter.

Perry had cloaked his plan under the pretense of grid reliability. But numerous experts, including a Department of Energy report, said this was a nonissue. According to an analysis from the Rhodium Group, a private firm focusing on policy analytics, the vast majority of power disruptions were caused by extreme weather, and “over the past five years, only 0.00007% were due to fuel supply problems.”

Or as FERC Commissioner Cheryl LaFleur wrote in the ruling, Perry was simply trying to “freeze yesterday’s resources in place indefinitely.”

To embrace such a proposed rule would have been bad for consumers and bad for competitive electricity markets, which continue to evolve. Natural gas is cheaper than coal. Renewables are becoming less and less expensive. The emergence of these sources has nothing to do with grid reliability.

Or again, to quote LaFleur, “I believe the Commission should continue to focus its efforts not on slowing the transition from the past but on easing the transition to the future.”

If the loser here is the former Texas governor then the winner is agency independence. That’s essentially what FERC Commissioner Neil Chatterjee said at a recent forum. The commissioners flexed their independence and followed the best policy for Americans.

Perry should think about doing the same.