Opposition to Trump power push creates strange bedfellows

Energy lobbyists and advocates have been working furiously over the last two months on the Trump administration’s plan to prop up coal and nuclear power plants. 

The surprise proposal by Energy Secretary Rick Perry at the end of September asks the Federal Energy Regulatory Commission (FERC) to require certain electric grid operators to pay more for electricity from coal and nuclear plants in an effort to improve the resilience of the grid. 

The proposal set off a lobbying frenzy and has made strange bedfellows of renewable power sources, natural gas producers, conservative think tanks and environmental groups who rarely see eye-to-eye. 

{mosads}Supporters of Perry’s proposal — primarily companies and associations in coal and nuclear power, along with some allies — argue the electric grid has a resilience problem and that stopping coal and nuclear plants from closing would address it.

Resilience, according to the plan’s backers, is the ability for the grid to bounce back into operation quickly after an outage, whether it’s caused by a plant going down, a pipeline disruption, a transmission issue, a terrorist attack or another problem. 

“We have been promoting the message of resilience, explaining what it means, explaining why it’s critical and explaining how fuel-secure sources like coal are necessary for grid resilience,” said Paul Bailey, president of the American Coalition for Clean Coal Electricity. 

Opponents say the proposal is unnecessary and will come with heavy economic costs for the country. 

“The bottom line is that this proposed rule would raise costs to consumers by as much as $10 billion, while not providing any meaningful increase in resiliency,” said Michael Steel, spokesman for the Affordable Energy Coalition, an ad hoc group of opponents like American Wind Energy Association, BP and Industrial Energy Consumers of America. 

“The biggest part of our effort is to let people know that, spread that message, make sure that this isn’t something that happens in a Washington back room without attention from the people that it would impact,” Steel continued. 

Perry gave FERC only 60 days to consider the proposal before taking action, which runs out Monday. FERC is one of the federal government’s more obscure agencies, and the way it conducts business confounds all but the most dedicated followers. 

“This is kind of an obscure policy area for a lot of folks, so we’ve been really trying to make sure it’s on their radar,” said Mary Anne Hitt, director of the Sierra Club’s Beyond Coal campaign. 

The Sierra Club has been attacking the proposal, mainly through public relations and social media efforts, by focusing on the environmental impacts of all of the coal plants that would be preserved or opened if the rule took effect. 

At the center of the debate has been FERC Commissioner Neil Chatterjee. He was chairman of the commission up until Thursday, when President Trump’s intended chairman, Kevin McIntyre, was sworn into office, and is one of the most vocal proponents of taking some sort of action to ensure coal and nuclear plants don’t close. 

“I think it’s important to fully understand, as we contemplate our energy future, what these changes in our marketplace and our fuel mix could mean for our future,” he told an energy conference last week. 

Chatterjee has in recent weeks called for FERC to implement an “interim” rule to give payments to coal and nuclear plants while the commission and grid operators study a more permanent policy. 

“One of the options we ought to consider would be an intermediate step, or an interim step, in which we find a mechanism … that could potentially keep some of these plants afloat while we do the longer-term analysis,” he said at the conference. 

Lobbyists on various sides of the issue say that the most striking result from the last two months has been how the Trump administration united so many different strange bedfellows in opposition, with natural gas, wind, solar, free-market advocates and environmentalists all fighting on the same side.

A dozen energy associations teamed up to file comments at FERC against the proposal, including Solar Energy Industries Association, the American Petroleum Institute, the American Council on Renewable Energy and the Electric Power Supply Association, among others.

“In the end, I think it speaks to how bad the proposal may have looked at first blush, that all these organizations came together in an effort to say we should tap the brakes,” said Todd Snitchler, head of market development for the petroleum group, which also represents natural gas. 

Years of plunging gas prices have spurred utilities to dramatically ramp up use of the fuel, undercutting coal and nuclear. Numerous studies have identified gas competition as the main reason for coal and nuclear plant retirements, with regulations also playing a major role.

“We think the market is working, and we’re not supportive of changes to the market that are going to be disruptive and be fuel-specific and choose winners and losers,” Snitchler said.

The American Council On Renewable Energy takes a similar approach.

“It’s helpful for us to be able to say that we’re confident we can not just compete, but really make critical headway looking just at the marketplace,” said Greg Wetstone, the group’s president. 

“It’s part of changing the perception of renewable energy as some kind of boutique alternative, when the world is changed. That’s no longer true. We’re mainstream power now.” 

But coal and nuclear say the opponents of the proposal are ignoring the real resilience problem that’s facing the grid if their plants keep retiring. 

Bailey said his coal group forecasts that 14 megawatts worth of coal generation will retire in the coming years without changes to electricity market rules, which amounts to the power demand for all of Maryland. 

“We’re going to lose that much of the coal fleet if we don’t get these market rules fixed,” he said.

Two of the most vocal supporters of Perry’s proposal are coal mining giant Murray Energy Corp. and the coal-heavy utility FirstEnergy Corp., both of whom have leaders with strong political ties to Trump. They stand to benefit greatly from the rule if it preserves coal demand.

“This is the single greatest action that has been taken, in decades, to support low-cost, reliable electric power in the United States, particularly after eight years of absolute destruction of the United States coal industry by the Obama administration and his Democrat supporters,” Murray Energy President Bob Murray said in a statement. 

Other responses to Perry’s proposal have been nuanced. Some agree that it’s important for federal policymakers to find ways to improve grid resilience and incentivize resilient plants — they just aren’t sure Perry’s proposal is the way to do it. 

“It’s not the proposal we would have written, necessarily,” said a utility lobbyist.

“People are having conversations about what the expectation should be for plant reliability, beyond just maintenance and the ability to withstand extreme weather events. And that’s a good thing,” the lobbyist said.