The Trump Administration’s Coal Bailout

The Trump Administration’s Coal Bailout
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Credit Lisk Feng

Federal energy regulators will soon vote on a ham-fisted Trump administration proposal to subsidize coal-fired power plants. This plan could cost families and businesses billions of dollars in higher electricity prices for no discernible public benefit.

The measure in question comes from the energy secretary, Rick Perry, and amounts to a devious and reckless attempt to prop up coal-fired plants, which have been shutting down in recent years because they cannot compete against cheaper and cleaner natural gas plants and renewable sources of energy like wind and solar.

Mr. Perry’s plan would provide what amounts to a bonus for power plants with at least a 90-day supply of fuel on site, which he says will make the electrical grid more reliable. Coal and nuclear power plants are the only ones that fit that description, because natural gas plants are supplied by pipeline and wind and solar require no fuel. But it is clear that the primary aim here is to bolster the coal industry, which President Trump embraced unreservedly on the campaign trail and whose moguls embraced him right back.

The fate of this boondoggle rests with the Federal Energy Regulatory Commission, an independent regulator that is not bound to do what the administration wants. Its five commissioners — three Republicans and two Democrats — ought to think carefully before casting their votes. Mr. Perry’s proposal could add around $11 billion a year to the cost of electricity, depending on how the rule is interpreted, according to four separate research reports. Yet it would do little to improve the electrical grid. That’s because less than one-hundredth of 1 percent of power failures between 2012 and 2106 were caused by fuel supply emergencies, according to the Rhodium Group, a research firm.

Regrettably, facts do not seem to matter to Mr. Perry, who famously called for the elimination of the Energy Department without understanding what it does. He has used a number of disingenuous arguments to justify his cockamamie proposal, including suggesting that it would have helped the grid deal with emergencies like the 2014 polar vortex, when frigid winds slammed the Northeast. In fact, the grid worked reasonably well then thanks to wind turbines and demand response, the system where grid operators ask big electricity users to temporarily use less juice. By contrast, some coal-fired power plants were unable to generate electricity because their coal piles froze and their equipment malfunctioned in subfreezing temperatures.

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