President Donald Trump’s proposal to subsidise coal and nuclear plants has been found to be neither justified nor reasonable by the Federal Energy Regulatory Commission (FERC).
The unanimous decision directly opposed Energy Secretary Rick Perry’s attempt to secure federal aid and at least 90 days' worth of production capacity for nuclear and coal plants, stating subsidies would hamper competition and increase consumer bills.
Secretary Perry’s subsidy plan was initiated in September last year to combat the recent market decline in the coal sector, caused by an uptake in more cost-effective oil, gas and renewable solutions. Perry maintained coal and nuclear power were “necessary to maintain the reliability and resiliency of our nation’s grid”, as other power sources were less reliable in extreme weather conditions.
Coal is currently facing a crisis, with many plants under threat of decommissioning. According to FERC, by the end of 2020 74 more coal-fired plants are expected to have shut down, totalling a generation capacity of 20.7 gigawatts.
In announcing its decision, FERC cited an existing department study's findings that "changes in the generation mix, including the retirement of coal and nuclear generators, have not diminished the grid's reliability or otherwise posed a significant and immediate threat to the resilience of the electric grid."
Joel Eisen of the University of Richmond law school said “the commissioners recognised the need for clear and careful analysis of the problem, rather than just accepting the simplistic solutions that the Department of Energy offered”.
Paul Bailey, president of the American Coalition for Clean Coal Electricity, said he was disappointed by the decision and added that the recent “bomb cyclone”, with storms and low temperatures hitting the eastern US, was “a reminder why we need a healthy coal fleet” to meet electricity demand.
Image credit: FERC Linkedin