One promise President Trump made during his campaign was that his administration would end what he and his supporters call “The War on Coal.” Recently, a federal agency rejected a Trump administration proposal that would have propped up the struggling coal industry. The Allegheny Front’s Reid Frazier talked to Kara Holsopple to explain what happened.
Kara Holsopple: So this proposal to help coal out was a pet project of Energy Secretary Rick Perry. What did you want to do?
Reid Frazier: Just for some background, the nuclear and coal industries have really been struggling mostly because of increasingly cheap natural gas. It’s sort of priced them out of the market, especially in Pennsylvania and the Mid-Atlantic. And some of these plants have been closing or are scheduled to close. Three Mile Island, for instance, the iconic nuclear plant near Harrisburg is talking about closing ahead of schedule. So Rick Perry wanted to prop up these legacy plants by basically allowing them to charge more — sort of guarantee profits for these companies and have them be more able to compete with cheaper natural gas and, increasingly, renewables like wind and solar. What he did was say that plants that can keep this 90-day supply of fuel on site would be guaranteed a sort of premium price for their energy. And the only plants that fit this bill are coal and nuclear. You can’t keep 90 days of natural gas on site, same with wind and solar. And his rationale was that if there is some sort of natural or manmade disaster, these plants could keep running for 90 days. Otherwise possibly the grid could go dark.
Kara: That sounds kind of scary. Could that really happen?
Reid: A lot of people say no. For our podcast, Trump on Earth, I talked with Ben Storrow, a reporter with E&E news. And here’s how he explained what people are saying about that question: Would the grid actually go dark if there was some sort of disaster?
Ben Storrow: “There’s a consulting group, the Rhodium Group, they did a study they looked at federal data of power outages and they found that .0 0 0 0 7 percent of all power outages in the last five years were due to fuel supply problems. So at its most basic, the criticism of this plan is that it’s trying to solve for a problem that doesn’t really exist.”
Reid: And there was a lot of opposition to this plan from a really broad spectrum of entities that don’t usually agree. For instance, for obvious reasons the renewable energy industry was against it because it would really hurt them. But also the oil and gas industry was against it because it would kind of favor coal and nuclear over natural gas. And people who are really gung ho about the free market were against it because they thought it was tipping the scales in the direction of one energy source over another.
Kara: Well all of this is kind of moot now because the Federal Energy Regulatory Commission nixed the proposal.
Reid: That’s right. So FERC is an independent body with both Republican and Democratic members. It’s five members on the board and they unanimously rejected the proposal. It’s worth it to note that four out of the five members on FERC’s body were appointed by President Trump. So it’s kind of a resounding defeat for Rick Perry but it’s not like the issue’s going to go away. These plants are still going to struggle. There’s still going to be a push to keep them on line both for political reasons but also for practical reasons. I don’t think anybody in the electric utility industry wants all coal and nuclear plants to just stop working. For one thing, nuclear energy is our largest source of carbo-free energy right now, and it accounts for about 20 percent of our electricity nationwide. So if gas starts to push coal off the grid, that would actually be bad for greenhouse gas emissions. One thing that the FERC did was say it would begin a new process to study whether fewer coal and nuclear plants pose a risks to the availability of electricity, especially during these natural disaster type scenarios.
Kara: You mentioned that this was an unpopular proposal for a lot of entities including grid operators. What are they doing to kind of bolster reliability without this emphasis on specifically helping out the coal industry?
Reid: Well the grid operator from Washington D.C. to Chicago is called PJM Interconnection. Something like 60 million people get their electricity off of it. And PJM has its own plan to keep coal and nuclear plants in the mix. It would allow coal and nuclear plants to charge more for their electricity which is kind of similar to the Department of Energy Plan but PJM thinks it would actually be better for consumers than the DOE’s proposal.
Kara: And this is something that will be passed along to ratepayers?
Reid: PJM says its proposal would cost ratepayers an additional two to five percent more in electricity bills. And Rick Perry’s proposal was devoid of details, but the cost could have been as much as 10 times more than PJM’s.
Kara: Now that this Energy Department proposal has failed, does the Trump administration have any other plans going forward to bail out coal?
Reid: We don’t really know for sure what the Trump administration is going to do going forward but we do know it’s going to try. So in Congress right now there’s lobbying being done from the coal and nuclear industries to actually just give them multibillion dollar tax credits which is basically just handing them cash to save their industries from bankruptcy defaults. And according to Axios, which did the reporting on this, the price tags could be up to 65 billion dollars for coal and around five billion dollars for nuclear.