Perry’s Scheme to Bail Out Coal and Nukes Will Boost Utility Bills, Not Energy Resiliency or Jobs

WASHINGTON Energy Secretary Rick Perry's scheme to require the use of electricity from coal and nuclear plants, even when cheaper sources are available, would drive up Americans' utility bills by billions of dollars. Perry’s scheme would do little to strengthen the reliability of the nation's power grid and would slow the remarkable growth of renewable energy jobs, which already outnumber jobs in coal mining or nuclear energy.

Those conclusions are based on EWG’s analysis of independent studies estimating the cost of bailing out unprofitable coal and nuclear plants, a federally sanctioned assessment of electricity supply, and energy sector employment data. When Perry testifies today before a key House Energy and Commerce subcommittee, its members should ask how he can defend his proposal as in the best interest of ratepayers, the economy or energy security.

"When Rick Perry was nominated, he admitted he didn’t understand what the Department of Energy does, and with this profoundly wrong-headed scheme he's proven it," said EWG President Ken Cook. "DOE’s stated mission is to address the nation’s energy challenges ‘through transformative science.’ But this plan would sabotage the transition to cleaner, safer renewable energy technologies by forcing American consumers to bail out the Trump administration's allies in the dying coal and nuclear industries.”

In 2016 about 53,000 Americans worked in coal mining and about 48,000 worked in the nuclear industry, according to the U.S. Bureau of Labor Statistics. By contrast, a nationwide census by the Solar Foundation found that in 2016 about 260,000 Americans worked in solar energy, and a similar survey by the American Wind Energy Association found that about 88,000 worked in wind power. The number of solar jobs doubled in the five years ending in 2016, and jobs in wind power grew by 20 percent from 2015 to 2016.

“While Trump and Perry are pushing failed policies to create jobs in the dying coal and nuclear industries, why not attempt to bring back milkmen, switchboard operators and ice cutters, too,” added Cook. “With this ridiculous proposal, the Trump administration is trying to take the nation backwards, instead of embracing new technology and the millions of jobs that come with it.”

Perry is urging the Federal Energy Regulatory Commission, or FERC, to quickly issue new rules that would force regional electricity suppliers to pay above-market-value prices for coal and nuclear power. Currently, operators of regional electricity grids shop around for the lowest-cost power sources available. But with the glut of natural gas on the market, and the cost of solar, wind and other renewable energy sources steadily dropping, energy from aging coal and nuclear plants has trouble competing.

As a result, utilities have closed some unprofitable coal-fired or nuclear power plants. Others are seeking additional taxpayer-funded subsidies to keep operating. The estimated costs of such bailouts are staggering. For example:

  • A recent study by the nonprofit Nuclear Information and Resource Service found that nationwide, bailing out nuclear power plants projected to be unprofitable by 2030 would cost $270 billion.
  • In August, the New York State Public Service Commission approved a bailout of the Fitzpatrick, Nine Mile Point and Ginna nuclear plants that will cost ratepayers $7.6 billion over 12 years. 
  • In Ohio this May, state lawmakers halted consideration of a deal to bail out the Davis-Besse and Perry nuclear plants, projected to cost ratepayers $5.25 billion over 16 years. But Ohio lawmakers are still considering legislation to bail out the Kyger Creek and Clifty Creek coal-fired power plants, which would cost ratepayers $1.4 billion by 2030.

Like Perry, proponents of these bailouts argue that keeping coal and nuclear plants running is necessary to ensure a dependable supply of energy from a variety of sources. Establishing and maintaining reliability and resiliency is the mission of the North American Electric Reliability Corporation, or NERC, which is overseen by FERC.

NERC’s annual reports for 2016 and 2017 concluded that although challenges exist, reliability of the U.S. electricity grid is adequate. An analysis of NERC’s 2016 Summer Reliability Assessment by the policy research firm Energy Innovation found that in the seven U.S. regional electricity markets, the actual capacity in those markets exceeded required reserve margins. Regional markets are required to have a margin of reserve capacity, but in each of those markets the excess was higher than the required margin. 

“In claiming that their dirty and dangerous plants are needed for energy security, the coal and nuclear industries are crying wolf, and Rick Perry is howling right alongside them,” said Grant Smith, EWG’s senior energy policy advisor. “Instead of trying to stick ratepayers with the cost of keeping these dying industries on life support, Perry should look at the facts and face the truth: The competition is over and renewables won.”

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