Legal & Regulatory

DOE’s Perry: Coal, Nuclear Must Be Saved

Energy Secretary Rick Perry said coal and nuclear power must be part of the nation’s “all of the above” energy strategy, but the Department of Energy (DOE) does not have the “regulatory or statutory ability” to establish economic incentives for struggling U.S. coal and nuclear plants.

Perry, who addressed the Edison Electric Institute’s (EEI’s) annual convention in Philadelphia on June 11, said the Federal Energy Regulatory Commission (FERC) would take the lead on creating incentives for any energy resource. Perry spoke with media after his address to convention delegates.

“FERC would be where I would direct your attention,” Perry said when discussing bailouts for coal-fired and nuclear power generation. He said he is not aware that FERC is working on any specific incentive plans. The DOE in 2017 told FERC to mandate that competitive power markets put in place rules to “accurately price” what the DOE calls “fuel-secure” generation.

“We’re pretty much at the same place we were 12 months ago,” Perry said. He added, though, that the Trump administration continues “to talk very openly” about the “all of the above strategy” when it comes to the nation’s energy supply.

Perry in his address to delegates continually touted how the U.S. has become the world leader in oil and gas production, and also said energy exports are important so that U.S. allies and trade partners do not look to other countries for their energy needs. He also said the U.S. must favor “innovation over regulation” when it comes to energy, and chastised some state governments—New York in particular—for regulations impeding energy infrastructure such as natural gas pipelines.

Federal Bailout Still an Option

Perry’s comments Tuesday came after the White House Council of Economic Advisors in March released a report to the president calling for a strategic electricity reserve that could provide support to financially struggling power plants. Perry earlier that month reiterated his position that a federal bailout of coal and nuclear plants was still an option, though he said state incentives might be a better path forward.

“Each state has their own economic right to either put tax credits, tax breaks [or] incentives in place,” Perry said in response to a question about House Bill 6 in Ohio, which would provide $190 million in subsidies for nuclear power each year through 2026. “I will say I’m a big fan of the ‘all of the above’ energy strategy, and for your state to be successful, you need to have tax policy, regulatory policy, that sends the message that capital is welcome in your state.”

Some states, such as Illinois, have put legislation in place to save nuclear plants. Some energy industry groups have challenged those subsidies, though the Supreme Court in April upheld lower-court decisions that support the subsidies.

Perry also said he supports a nuclear bailout bill in Pennsylvania. He said the measure would bring “thoughtful, competitive programs where states don’t have to rely upon the federal government to support a particular industry sector.” He also said conversations continue in the White House about how to preserve coal and nuclear resources, after saying the previous administration imposed “blatantly discriminatory” regulations on certain fuel types.

“The previous administration in particular didn’t like coal,” Perry said. “They were clearly not looking to help the coal industry out at all. I just think we need it all.”

FERC Nominee Who Opposed Bailout Dropped From Consideration

Also Tuesday, POLITICO reported that a potential nominee for a seat at FERC is no longer being considered. POLITICO said David Hill, who served as DOE’s general counsel under President George W. Bush, and thought to be in line for a FERC seat, was dropped from consideration after pressure from Perry and coal companies led by Trump allies.

Hill had been publicly critical of the administration’s stance on offering financial aid to coal plants, saying DOE’s proposal to FERC aimed at propping up money-losing coal and nuclear power plants is “absolutely not the solution” to fix electricity markets. FERC last year rejected the DOE plan.

Perry and other senior DOE officials, along with coal companies Alliance Resource Partners and Murray Energy Corp.—both major Trump and Republican Party donors—pushed back against Hill. POLITICO said Hill on Tuesday confirmed that he was told last week his nomination process had been ended. The White House declined to comment.

Alliance Resource Partners is led by Joe Craft. Trump has said he could nominate Craft’s wife, Kelly Knight Craft, to be U.S. ambassador to the United Nations.

Hill had been expected to fill the vacancy created by the death of former FERC Chairman Kevin McIntyre earlier this year.

FERC is an independent agency with a five-person board of commissioners. The group oversees much of the nation’s electric grid as well as regional power markets. FERC is supposed to be non-partisan, though its commissioners are political appointees.

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).

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