Rick Perry, put American electricity consumers first

Over the next few months, we’ll find out if economic growth really is a priority for the Trump administration. If it is, you would think that the renewable energy industry, which has garnered nearly $100 billion in domestic investment over the past two years, would be looked upon favorably. This same industry was also the number one source of private sector infrastructure investment over the past five years.

Driven by a compelling combination of decreasing costs and increasing demand for renewable power, wind and solar energy are thriving, despite the reality that these technologies are competing against natural gas at record low prices in the market to provide Americans with electrical power. This incredible growth has created the nation’s two fastest growing job categories, wind turbine technician and solar power installer — all while generating low cost power for American homes and business. Only affirmative government intervention in the electricity marketplace could undermine the continuing competitiveness of wind and solar power. 

Unfortunately, that is exactly what is being considered.  

{mosads}Two unprecedented and dramatically different policy processes are unfolding this month within little known government agencies. The first looks to prop up coal and nuclear plants and the second seeks to impose tariffs on solar panels. When combined, these two-monumental decisions could hobble the competitiveness of renewable energy and undermine one of America’s most important drivers for economic growth.

On the first issue, on September 29 the Secretary of Energy Rick Perry formally proposed that the Federal Energy Regulatory Commission (FERC) establish new rules that would have electricity consumers subsidize coal and nuclear power plants that keep fuel on-site to promote “resiliency” of the electrical grid. Curiously, the DOE’s recent study of the grid fails to document any resiliency problem that coal and nuclear power would remedy, and experience has shown that on-site fuel can be a source of vulnerability, including the freezing of coal piles during the Polar Vortex, and the flooding of coal supplies during storm and flood conditions. 

The decision on whether to upend the current electricity marketplace with new subsidies for coal and nuclear power will ultimately rest with FERC, which has recently been reconstituted with a majority of new Trump administration appointees. None of these appointees have in the past supported this sort of direct interference in the electricity market, but in these strange times it is anyone’s guess how this will play. We do know that DOE has urged FERC to use a dramatically accelerated time frame for consideration of this matter, so FERC deliberations in this area could move forward very quickly. 

On the second issue, the renewable energy industry is confronted with a trade case that could lead to substantial new solar tariffs, potentially undermining the cost-effectiveness that is driving solar energy growth.

This process began with a formal vote at the International Trade Commission (ITC) in late September, which found that imported silicone crystalline solar panels have harmed U.S. manufacturers. The next step in the ITC process is the establishment of remedies, which could include tariffs that would drive up the price of American electricity and undermine the competitiveness of solar power in the United States. While the ITC will be making a recommendation, it is the president who ultimately will determine the response to the ITC decision in a process expected to conclude by the end of January. Solar advocates will be urging that he look to strategies that boost domestic manufacturing and competitiveness without increasing electricity prices or interfering with the fundamental economics of solar power.

If this administration truly cares about economic growth and American jobs, the president and his appointees at FERC will support the nation’s booming renewable sector, avoid government interference in the electricity marketplace, and steer clear of new bureaucratic initiatives that increase electricity prices. We will find out soon enough.

Greg Wetstone is the president and CEO of the American Council on Renewable Energy (ACORE), a national nonprofit organization dedicated to advancing renewable energy through finance, policy and market development. With member companies from across the spectrum of renewable energy technologies and close ties to the renewable energy finance sector, ACORE is the preeminent voice for the nation’s renewable energy industry.