AEE Statement: No Need for Federal Emergency Support of Unprofitable Coal, Nuclear Plants

WASHINGTON, March 29, 2018 — Today, national business group Advanced Energy Economy (AEE) issued the following reaction to news about FirstEnergy filing a formal request for federal emergency support of unprofitable coal and nuclear plants, under the rarely used U.S. Dept. of Energy (DOE) section 202(c) authority:

“Advanced Energy Economy calls on Secretary Perry to reject FirstEnergy’s blatant appeal for a multi-billion dollar bailout of uneconomic and unnecessary power plants,” said Malcolm Woolf, senior vice president of policy for AEE, a national business organization. “This outrageous attempt to evade established market procedures is unprecedented. FirstEnergy is asking the Secretary of Energy to exercise authority that is reserved for an emergency threatening national security just to salvage power plants that are losing money for their owners and costing money for consumers. PJM currently has generating capacity well in excess of that needed to keep the lights on. FirstEnergy’s request attempts to short-circuit PJM’s well-established process for analyzing the reliability impacts of generation retirements, and ignores FERC's ruling earlier this year finding that no emergency exists that would justify providing special treatment to coal and nuclear power plants in our competitive electricity markets. We fully expect Secretary Perry to reject this application as an inappropriate use of his emergency powers, just as he did last year when Murray Energy asked him to keep coal plants open.”

Background Materials:

• Analysis Group report, Electricity Markets, Reliability, and the Evolving U.S. Power System, finds market forces – primarily low-cost natural gas and flat demand for electricity – are causing coal and nuclear power plants to retire, not state and federal policies supporting renewable energy development. The report finds that the changing resource mix poses no threat to reliability of the nation’s power system. 
• Grid operators for all regions testified before a House energy subcommittee hearing about grid reliability last July, noting record reliability preformance, how they have adapted to evolving energy mix, and concerns mainly about cybersecurity threats.
• AEE Institute report, Changing the Power Grid for the Better, shows today’s electric generation mix is more diverse than ever; low-priced gas is primarily driving the change in resources, followed by flat load growth and competition from renewables; ERCOT and PJM experience shows reliable grid management with high degree of variable renewables even in extreme conditions.
• AEE report, Bailout Without Benefit: DOE's Proposed Rule Would Drive Up Cost, Do Nothing to Strengthen the Grid, summarizes arguments against the proposed rule that would have subsidized coal and nuclear plants with 90-day onsite fuel supply.
• FERC denied DOE's proposed grid reliability rule and opened new inquiry, now in process, on grid reliability definition and issues. RTO's/ISO's filed their comments March 9 and other stakeholder comments are due May 9 (per an extension granted last week).
• This action follows a string of efforts to support coal and nuclear plants since early last year. For an overview see AEE blog posts here, here, and here.

About Advanced Energy Economy
Advanced Energy Economy is a national association of businesses that are making the energy we use secure, clean, and affordable. Advanced energy encompasses a broad range of products and services that constitute the best available technologies for meeting energy needs today and tomorrow. AEE’s mission is to transform public policy to enable rapid growth of advanced energy businesses. AEE and its State and Regional Partner organizations are active in 27 states across the country, representing more than 1,000 companies and organizations in the advanced energy industry. Visit AEE online at www.aee.net and follow our news @AEEnet.