Trump’s Plan to Save Coal, Nuclear Plants in Trouble
The administration of US President Donald Trump plans to keep coal and nuclear power plants running, but analysts are skeptical it will do enough to prevent more of the facilities from closing down.
Energy Secretary Rick Perry has proposed subsidizing coal-fired plants and nuclear power stations to compensate them for the reliable energy they provide to the nation's grid. The Federal Energy Regulatory Commission, which Perry directed to study the issue, is scheduled to deliver a decision on the proposed rule on Monday, CNBC reported.
On Thursday, incoming FERC Chairman Kevin McIntyre asked Perry for a 30-day extension.
Ahead of that decision, energy analysts say the plan, along with a related proposal from a regional energy organization, would likely boost cash flow for some embattled power producers. But those benefits might not be big enough to dissuade them from shuttering noncompetitive plants, even as the plan raises electric power costs for ratepayers.
In vowing to revive the coal industry and stop the decline of nuclear energy, Trump is fighting against a tide of coal and nuclear power plant closures. That trend is being driven by growing competition from cheap, cleaner-burning natural gas and renewable energy, as well as weak power prices and environmental regulations.
Perry's rule would apply in several regional wholesale energy markets established during a wave of deregulation in the early 2000s. Companies that generate electric power and sell it into these markets have struggled to find a winning business model in the face of seismic shifts in the utility space.
Some say Perry's plan is too little, too late. Many publicly traded utilities have for years been shedding coal and nuclear power plants, says Travis Miller, director of utilities research at Morningstar.
"If we rewind 10 years, this would be a major issue for many of the utilities," he said. "Now, it's almost irrelevant for the publicly traded utilities. But it's very relevant for the market."
The plan would raise electric power prices by hundreds of millions or billions of dollars per year, three separate studies found. The range is wide because there are few details about the plan.
Over the next decade, power costs could rise between $18 billion and $288 billion under the Perry plan, according to a study by PJM Interconnection, which runs the transmission grid and energy market in all or part of 13 eastern states and Washington D.C.
Analysts say Perry's rule would mostly affect the PJM region, which includes Pennsylvania, New Jersey and Maryland.
source: Financial Tribune
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