Perry: ‘There is no free market in the energy industry’

Energy Secretary Rick Perry defended his proposal for high payments to nuclear and coal plants Friday, hitting back at the idea that his new proposal to the Federal Energy Regulatory Commission (FERC) would disrupt a competitive market.

“I think it’s really important for people to understand, in general terms, there is no free market in the energy industry,” Perry told a meeting of the group Veterans for Energy.

{mosads}“And anybody that gets up and says that is lying — is not, with all due respect, educated as to what the reality of the market is.”

Perry asked that FERC, within 60 days, implement a new rule that would allow certain coal and nuclear plants to get paid their costs, plus a fair rate of return, for the power they produce, even when competitors like natural gas or renewables could bid lower prices.

The idea is meant to incentivize “resilient” power sources with stockpiles of fuel on site. But environmentalists and advocates for other electricity sources have fought back, saying that Perry’s idea is just a plan to help out uncompetitive coal and nuclear for political purposes.

The former Texas governor said the Obama administration “had their thumb on the scale” to help out renewables, to the “detriment … of reliable, baseload industries that are really important for the future security of this country.”

He went on to defend the proposal as merely a way to start a conversation and not a command to the FERC, which is an independent commission.

“It wasn’t a directive,” he said, adding that it was a way to tell FERC, “let’s have this conversation about making sure that we have an energy foundation that’s stable, resilient, and I happen to think that coal and nuclear should be a part of that.”

The proposal repeatedly used strong language, such as saying that FERC “must adopt rules” and “must act now.”

FERC has started accepting comments on the proposal, and it plans to take some sort of action on it by the end of the 60-day time frame, which will be in early December.

Of the three commissioners currently in FERC, two have criticized it.

Commissioner Rob Powelson, a Republican, criticized the proposal to utility representatives earlier this week, saying that FERC “will not destroy the marketplace” and it “does not do politics,” according to S&P Global Market Intelligence.

Commissioner Cheryl LaFleur endorsed Powelson’s view, tweeting “Great message!” with a link to the news story.