Ep. 32: Who Will Pay for Trump's Plan to Bail Out Coal?
The Trump proposal would subsidize coal plants that would otherwise be driven out of business by cheaper and cleaner natural gas. Photo: Getty Images
JANUARY 8, 2018 UPDATE: An independent federal commission terminated a Trump administration proposal that would have propped up struggling coal and nuclear plants. On Monday, the Federal Energy Regulatory Commission — an independent body with both Republican and Democratic members – unanimously rejected the Department of Energy’s “Grid Resiliency Pricing Rule” that would have forced the electric grids in some parts of the country to basically guarantee profits for coal and nuclear plants. READ MORE HERE.
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This episode's guest is Ben Storrow, a reporter for E&E News. Storrow said the proposal is a response to changes in the grid, which is changing because of new technology.
“Basically what’s happening is a lot of those traditional power plants — like coal and nuclear — which were built to run around the clock, and are the foundation of our grid, are having trouble making money — and they’re closing. And so Rick Perry is concerned about that and is trying to come up with a plan that he says will ensure the resiliency of our grid by keeping these plants open,” he said.
How does it work? The plan has been described as the “squirrel plan.” That’s because the federal government would pay coal plants to store 90 days of fuel. The theory is that if you have the fuel on site, and there’s an emergency of some sort, it’s ready to go.
But is a 90 day supply going to actually help keep the grid operating after a hurricane or some sort of unforeseen event? Why 90 days? Storrow said that question gets to the heart of the controversy of the plan.
“There are a lot of people who question the basic assumption of the whole plan,” he said. He points to a recent study by the Rhodium Group, which found that .00007 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. And we’ve seen a lot of the grid operators come out against it; we’ve seen state regulators states come out against it; we’ve seen the oil and gas industry form a really unique alliance with renewable companies.”
Storrow said there’s a pretty small base of support that largely centers around the big coal mining companies. They say the plan is necessary and without it, the lights are going to go off.
“They’ve sought to push this idea that we’re on the precipice of a crisis. I think part of why this is such a controversial plan is that a whole lot of people who monitor the grid, they just don’t see it like that. The grid is changing and moving to more natural gas and solar. It’s not necessarily a good thing or a bad thing; it’s just a different operational and economic model than what we’ve had in the past.”
Who is going to pay for it and how much will it cost? The simple answer, said Storrow, is anyone who consumes electricity — in the form of a higher electric bill.
“I think people would be unsurprised to know that supporters of the plan say that this is a relatively modest cost and worth it to ensure that when we flip on the light switch it works. And opponents say that it’s going to be really, really costly — maybe into the billions of dollars.”
Mentioned in This Episode:
The Rhodium Group study: Electric System Reliability: No Clear Link to Coal and Nuclear
Rick Perry’s Plan to Rescue Struggling Coal and Nuclear Plants Is Rejected
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This episode was hosted by Reid Frazier. Trump on Earth is produced by The Allegheny Front, a Pittsburgh-based environmental reporting project, and Point Park University's Environmental Journalism program.
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