Critics of President Trump's coal bailout plan are urging vigilance, not victory, in the wake of reports that the plan has been shelved, fearing that a Trump "Plan B" is right around the corner.
“‘Shelved’ does not mean thrown in the garbage,” said Gillian Giannetti, staff attorney with the environmental group Natural Resources Defense Council. “'Shelved' is meant to be able to hold things that you can take down and use.”
Reports earlier in the week indicated that the White House decided to shelve the idea of asserting a national security justification for providing coal and nuclear plants with some sort of market-based subsidy.
But Giannetti warns that there are “a lot of different ways to achieve the same end here.”
The group, which houses a specific task force that monitors electricity market concerns, says there are a number of “different mechanisms that can achieve the same end,” including actions underway at the Federal Energy Regulatory Commission, or proceedings taking place within the largest grid operator in the country, PJM Interconnection, which FERC oversees.
Also, it is not completely known what the strategy Energy Secretary Rick Perry had been pondering since June, when the president directed him to come up with recommendations on how to save uneconomic coal and nuclear plants.
“There is still a lot of vagueness in what DOE was even considering doing itself, whether it was through the Federal Power Act or Defense Production Act,” said Giannetti. “I think there are so many balls in the air right now that just because there are reports that one type of proposal might have been shelved, doesn’t mean potentially catastrophic consequences of a bailout have been avoided.”
Tyson Slocum, energy director at Public Citizen, the consumer advocacy group founded by Ralph Nader, is convinced Trump is not giving up on the coal plan.
“They’re not going to throw in the towel on this,” Slocum said.
Look no further than FERC headquarters if one wants evidence of that, said Slocum, who is part of a large coalition on both sides of the aisle opposing the coal resiliency plan, otherwise known as the “bailout.”
FERC started out by unanimously rejecting the very first incarnation of the bailout proposed in September 2017 by Secretary Perry.
But Republican FERC nominee Kevin McIntyre vowed to study the issue that Perry raised, which was keeping power plants from retiring because of the “resilience” they provide to the grid.
Meanwhile, McIntyre and the two other Republican FERC commissioners, Neil Chatterjee and Robert Powelson, who later resigned, floated two very “controversial” orders “setting the stage for the market-driven and bailout procedures,” Slocum said.
First, there was the New England proposal that marked the first time that FERC proposed a minimum offer price rule for renewable energy. The rule would essentially force renewable energy resources to bid in at a higher rate, thereby making the market more accommodating to uneconomic or more expensive resources.
In the markets that FERC oversees, the lowest price resource rules. That means renewables and natural gas go ahead of the others in being granted access to transmission to sell their power. More expensive plants, such as coal and oil, are placed in the back of the line.
This has also caused a drop in capacity prices, which are the fees power plants are paid to be at the ready to deliver electricity due to a shortfall in supply, according to Slocum. It has caused a situation in which fossil fuel power plants can’t turn a profit, so they want FERC to change the rules to force renewables to bid in at a higher price, he said.
The fear: The coal bailout is alive and well at FERC, although the commission is more deliberate and is trying to apply market principles to address so-called resilience.
The minimum price order has now made its way into the largest electricity market in the country, run by PJM Interconnection. The commission is now holding an administrative hearing on how PJM could apply the mechanism to support ailing coal and nuclear plants.
FERC could require PJM to apply the minimum price idea to make coal and nuclear more competitive with low-cost natural gas plants that are dominating the market, in addition to renewables.
PJM is proposing to pay natural gas generators, essentially, not to generate in order to keep coal and nuclear in the mix, according to Slocum and others fighting the idea.
Coal proponents are also looking to FERC to move quickly on its resiliency efforts.
American Coalition for Clean Coal Electricity CEO Michelle Bloodworth released a white paper Thursday detailing how they want FERC and PJM to move forward.
They also point out that PJM is putting out a resiliency report, expected on Nov. 1, that they say will help make coal plants' arguments at the commission.
They say the commission is moving too slowly and want it to issue a “roadmap” to lay out milestones and a plan for completing its review of grid resilience.
Another big issue is getting the Senate to confirm Trump’s latest FERC nominee, Bernard McNamee.
Opponents of Trump’s resiliency plan say McNamee is the key to getting the resiliency plan out of FERC.
Right now, the commission is at a 2-2 stalemate if it were to vote on the plan. McNamee would break the tie with Democrats.
Trump's regulatory agenda, released earlier this week, says FERC's resiliency actions are still "to be determined" as to when they will be finalized.