The Trump administration has asked a federal agency to step in and help save the coal and nuclear industries. Energy Secretary Rick Perry has proposed a rule that will force the electric grids in some parts of the country to basically guarantee profits for coal and nuclear plants.
But who will pay for that guarantee? Anyone who gets an electric bill, said Ben Storrow, a reporter for E&E News, on the Trump on Earth podcast. Storrow says the proposal is a response to changes in the grid, which is changing because of new technology.
“Basically what’s happening is a lot of those traditional power plants — like coal and nuclear — which were built to run around the clock, and are the foundation of our grid, are having trouble making money — and they’re closing. And so Rick Perry is concerned about that and is trying to come up with a plan that he says will ensure the resiliency of our grid by keeping these plants open,” he said.
How does it work? The plan has been described as the “squirrel plan.” That’s because the federal government would pay coal plants to store 90 days of fuel. The theory is that if you have the fuel on site, and there’s an emergency of some sort, it’s ready to go.
But is a 90-day supply going to actually help keep the grid operating after a hurricane or some sort of unforeseen event? Why 90 days? Storrow said that question gets to the heart of the controversy of the plan.
“There are a lot of people who question the basic assumption of the whole plan,” he says. He points to a recent study by the Rhodium Group, which found that .00007 percent of all power outages in the last five years were due to fuel supply problems.
Listen to the entire interview here:
“So at its most basic, the criticism of this plan is that it’s trying to solve for a problem that doesn’t really exist. And we’ve seen a lot of the grid operators come out against it; we’ve seen state regulators states come out against it; we’ve seen the oil and gas industry form a really unique alliance with renewable companies.”
Storrow said there’s a pretty small base of support that largely centers on the big coal mining companies. They say the plan is necessary, and without it, the lights are going to go off.
“They’ve sought to push this idea that we’re on the precipice of a crisis. I think part of why this is such a controversial plan is that a whole lot of people who monitor the grid, they just don’t see it like that. The grid is changing and moving to more natural gas and solar. It’s not necessarily a good thing or a bad thing; it’s just a different operational and economic model than what we’ve had in the past.”
And how much will it cost people on their electric bills?
“I think people would be unsurprised to know that supporters of the plan say that this is a relatively modest cost and worth it to ensure that when we flip on the light switch it works,” Storrow said. “And opponents say that it’s going to be really, really costly — maybe into the billions of dollars.”
The Federal Energy Regulatory Commission will issue a decision on what to do with the plan January 10.