The Independent View: NY AG Blasts Trump Admin’s Coal Boost

The Trump Administration wants to Mandate that Coal, Nuclear and Hydroelectric Power Plants get Paid Higher Prices for Electricity than they are currently Receiving. Energy Secretary Rick Perry sent the proposed Requirements Friday morning to the Federal Energy Regulatory Commission (FERC), asking for quick action from the Commission to protect Coal and Nuclear Plants that are on the verge of Closing because of Competition or other Economic factors.

Perry is seeking the New Regulation in the Name of Electric Grid Resilience. It is the most Concrete Action yet by the Trump Administration to try to Save Coal and Nuclear Plants, something Perry has named as a Top Concern.

“A diverse mix of power generation resources, including those with on-site reserves, is essential to the reliable delivery of electricity — particularly in times of supply stress such as recent natural disasters. My proposal will strengthen American energy security by ensuring adequate reserve resource supply and I look forward to the commission acting swiftly on it.”

The Energy Department does not itself have the Authority to create the Rule. Instead, Perry is relying on a little-used Authority he has under a 1977 Law to formally call upon FERC to issue the Regulation. While FERC Commissioners are appointed by the President, the Agency is otherwise Independent and not obligated to follow through on Perry's Request.

Under Perry’s Proposal, Independent System Operators and Regional Transmission Organizations, the Entities that operate Regional Electric Grids, would be required when Signing Wholesale Electricity Contracts to allow certain “resilient” power plants to get a “fair rate of return,” even when Prices would otherwise be Lower.
Currently, Grid Operators in most of the Country use Competitive Markets, in which the Lowest-Cost Power Sources usually get Contracts.

Since FERC’s Rules must not choose One Power Source over Another, Perry’s Proposal would apply to Plants with a 90-day On-Site Fuel Supply and “be able to provide essential energy and ancillary reliability services.” That definition appears to apply to Coal, Nuclear, and Hydroelectric Power. Natural Gas Plants usually receive Fuel via Pipeline, but could ostensibly store a 90-day Supply.

The FEC must consider the Proposal within 60 days, though it is not obligated to take any Policy Action on it.

The Proposal comes after an Energy Department report on Grid Resilience last month. That Report concluded that Coal and Nuclear Plant Closures could cause Resilience problems at some point in the future, but Grid Operators are currently handling the challenges well.

New York Attorney General, Eric Schneiderman criticized today, a Proposal by the Trump Administration that would allow Coal-Burning Power Plants to be Paid Higher Prices for Electricity.

Schneiderman, in a Statement, Linked the Boost for Coal with Climate Change and the spate of Hurricanes to Hit the United States in recent weeks. “In the wake of some of the most devastating storms in our nation’s history, it’s outrageous that the Trump administration would seek to prop up our dirtiest, most expensive, and climate-polluting sources of energy under the guise of promoting resiliency and reliability,” Schneiderman said.

“States like New York have demonstrated that clean, renewable forms of energy not only enhance public health and our environment, but also add jobs, hold the line on electricity rates, and make our energy systems more secure and reliable.”, he wrote.

Schneiderman has challenged previous efforts by the Trump Administration to change Environmental Regulations, part of a Multi-State Legal Challenge to preserve the Obama-era Rules.

The effort by Democratic Attorneys General to file State-Based Legal Challenges is not dissimilar from the method employed by Republican AGs when President Obama was in Office.

Schneiderman again raised the possibility of another Legal Challenge to this Proposal, which was introduced by the Department of Energy. “Given that the leading cause of power outages is extreme weather—which is exacerbated by climate change—the Trump administration’s head-in-the-sand approach would actually undermine grid resiliency and reliability while promoting climate change and its catastrophic impacts,” he said. “My office will forcefully oppose this and other efforts of the Trump administration to put the interests of special interests ahead of the health, safety, and wallets of New Yorkers.”