DOE Plan Unites Fossil Fuel and Renewable Energy Groups

by Denise A. Bode

A proposal by the Department of Energy has created an alliance heretofore not seen between the fossil fuel and renewable energy industry.  They have united to oppose the Trump administration’s plan to create new rules to provide subsidies for the nuclear and coal-fired power plants, which have been suffering economically from increased competition from low-cost natural gas.

DOE Secretary Perry issued the directive to the Federal Energy Regulatory Commission (FERC) stating that it should issue an interim final rule enacting new pricing rules for the electricity market to preserve coal and nuclear plants, citing the recent hurricanes in Texas and Florida as reasons for creating new rate structures for coal and nuclear.

The coalition responded by filing a motion with FERC seeking to slow down action on Perry’s directive. They argued that if FERC were to follow his guidance, it would be violating the Administrative Procedures Act, a law governing regulatory process and procedure.  While they proposed at least 90 days for interested parties to provide initial comments, the Commission denied the request and decided to only take comments through Oct. 23 and reply comments through Nov. 7.

The unusual coalition included the American Council on Renewable Energy, American Petroleum Institute, American Public Power Association, American Wind Energy Association, Electricity Consumers Resource Council, Electric Power Supply Association, Interstate Natural Gas Association of America, National Rural Electric Cooperative Association, Natural Gas Supply Association and Solar Energy Industries Association.

Groups such as the Electric Power Supply Association have been leading the fight against state programs that look to protect coal and nuclear power plants. The group represents a segment of natural gas power plant owners that argue that the state programs constitute market-distorting subsidies for nuclear power plants.


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                FROM THE CHART ROOM

                Renewable Investment Still Growing In The U.S., But Still Need The Tax Credit

                investment-in-wind

                The Trump administration’s move to kill the Clean Power Plan has not dimmed investor enthusiasm for clean energy. Since the president signed the order to roll back the emissions-curbing rule, almost $30 billion has been spent on solar and wind projects. Data compiled by Bloomberg New Energy Finance show that in the third quarter alone, clean energy spending in the U.S. hit the highest level in two years, totaling $14.8 billion. Renewables are now cheap enough to thrive without subsidies in some parts of the world, including Brazil and Mexico. A key reason is that demand for electricity is growing in those regions. In the U.S., renewables have become the cheapest source of power in some regions, even without tax credits. The problem is demand for electricity has stagnated. So wind and solar farms only make economic sense if they can be built for less than it costs to keep the generators spinning at existing coal plants. The tax credits — which begin phasing out this year for wind and in 2020 for solar — are necessary for that to happen.

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                Michael Best Strategies’ Energy Team

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