U.S. regulators set expedited timeline for coal, nuclear bailout

FERC appears to be making good on Secretary Perry’s promise to rapidly introduce subsidies for “baseload” coal and nuclear power plants, a request for which Perry and the Trump Administration have never found a rationale that holds water.

In the face of all facts to the contrary, Secretary Perry is still claiming that reliability and resiliency concerns mandate the out-of-market support of such conventional generation. And the Federal Energy Regulatory Commission (FERC) has now agreed to an expedited schedule (see the notification letter below), a development first reported by UtilityDive, with initial comments due on October 23 and a second round on November 7.

And in what may foreshadow legal fights to come, this rapid and ill-supported move managed to get the oil and gas industry signing on to a legal motion with solar, wind and renewable energy organizations. Late yesterday, eleven industry organizations representing an array of interests filed a motion with FERC protesting the order an expedited ruling to bail out failing coal and nuclear plants, noting that without an emergency, there is no legal basis for such a process.

“To demonstrate good cause, an agency must establish: the existence of an emergency; that prior notice would subvert the underlying statutory scheme, or that Congress intended to waive notice and comment rulemaking requirements,” notes the letter. “None of these circumstances exists such that the extraordinary use of an interim final rule would be justified, and the Letter does not even attempt to suggest they do.”

The energy industries further note that both DOE and National Electric Reliability Council have both released reports “categorically concluding” that there is no reliability emergency. Instead, the energy associations called upon FERC to reject the request for an interim final rule and to follow a normal process.

Opposed by oil, gas, solar, wind… and more

It is not a surprise that such a motion was rejected by Trump appointees such as Neil Chatterjee, who currently serves as FERC’s interim chair. After all, the motion was filed on behalf of the American Council on Renewable Energy (ACORE), Solar Energy Industries Association (SEIA), American Wind Energy Association (AWEA) and Advanced Energy Economy (AEE) – which constitutes the usual suspects of clean energy advocacy.

However, in opposing this measure they are joined by the American Petroleum Institute, which represents the most powerful industry in the nation, as well as two natural gas trade groups, other electric industry trade groups, a municipal utilities’ association and the National Rural Electric Cooperative Association. This means that pretty much every active group in the electric power industry other than the coal and nuclear lobbies opposes the expedited rule-making.

As well they should, given that subsidies to keep aging, uncompetitive coal and nuclear power plants online will inevitably drive up market prices and distort the functions of wholesale power markets (pv magazine covered this issue in our September print edition).

However, this is unlikely to stem the resolve of the Trump Administration, which has begun with the assumption that coal and nuclear power plants must stay online and has waged an unsuccessful campaign to attempt to find evidence to back up this assertion. This includes the DOE study on the retirement of such generation which clearly showed that this is not a threat to the reliability of the bulk power system.

And even if Trump’s FERC does issue an expedited ruling, it remains to be seen if any such bailout can survive the legal battle that will ensue when the rest of the power industry pushes back with the best energy lawyers money can buy.

To say nothing of state authorities, as the governors of California, New York, Oregon and other states are likely to staunchly reject such federal meddling into the operation of wholesale markets in their states, and one that directly contradicts their efforts to move to a cleaner power system based on renewable energy.