Opposition mounts to DOE Secretary Perry threat to upend U.S. wholesale energy market with nuke/coal bailout

Secretary of Energy Rick Perry’s Notice of Proposed Rulemaking (NPOR) is asking the U.S. Federal Energy Regulatory Commission (FERC) to indefinitely subsidize exorbitantly expensive, dangerous and dirty energy from nuclear power stations and climate-destroying coal-fired plants at a cost to the U.S. economy independent energy analysts estimate at $10.9 billion per year. On the pretense of providing reliability to the nation's electric grid system, the unprecedented subsidy would be collected from the nation’s business and residential consumers to keep antiquated and unecomocial electricity generators running. Perry’s proposed rulemaking is disingenuously offered as the only way the country can provide “resilience and diversity” to the nation’s aging electricity grid system. The Department of Energy (DOE) is pressuring the FERC to levy new energy tariffs for generators that have a 90-day fuel supply stored onsite under “to operate during an emergency, extreme weather conditions, or a natural or man-made disaster.”

Ironically, rather than provide the electrical grid with resiliency and reliability in times of natural disaster and national security threats, nuclear power stations are the most vulnerable and unreliable of electricity power generators. Extreme weather conditions that interrupt electric grid stability (earthquakes, heavy ice storms, high winds, hurricanes, tornadoes, etc.) result in the reactor automatically shutting down or SCRAM. Every nuclear power station security training exercise at nuclear power stations begins with a mock attack to cut off the offsite power to reactor safety systems. Because nuclear power safety syste essentially rely upon grid power, nuclear power plants cannot be used to power up the electric grid after it goes down or "black start. The reactors also power down or SCRAM in the event of other extreme weather events affecting the “ultimate heat sink” (lakes, rivers, reservoirs) that supply reactor cooling water. At one extreme reactors must shut down when receiving water resources freeze and clog cooling water intakes become jammed with ice floes. The same is true for coal-fired generators in extremely cold temperature, coal piles freeze so hard as to make them unusable.  At the other extreme, a long drought can sufficiently lower cooling water levels and heat waves increase cooling water intake temperatures to make reactor cooling inefficient forcing reactors to significantly power down and even shut down.

In fact, the DOE proposed new tariff is aimed at compensating economically failing coal and nuclear power plants’ for their “operating and fuel expenses, costs of capital and debt, and a fair return on equity and investment.”  The FERC is expected to make a decision by December 11, 2017 on whether or not to bailout ten money losing energy companies and up to 90 U.S. power generators that otherwise have to permanently close.

A broad coalition of energy generators from practically every other sector of the U.S. energy market, from natural gas to the solar and wind power industries as well as bipartisan former FERC commissioners, and safe energy consumer groups have mobilized to strongly oppose the DOE’s proposed rulemaking. The coalitions cite that indenturing business and ratepayers to prop up failing nukes and coal-fired plants would wreak havoc on the U.S. wholesale power market, its practices and the nation’s energy future.

The Nuclear Energy Institute is supporting the bailout saying “Generation resilience and resource diversity are critical to our ability to continue providing reliable electric supply, and those attributes are not currently valued by the markets.”

However, on closer scrutiny, Perry’s DOE rulemaking didn’t bother to quantify what the bailout’s cost would be to the U.S. economy. According to expert Professor Ari Peskoe, a senior fellow in electricity law at the Harvard Law School Environmental Law Program Policy Initiative, it is an “incredibly flimsy document” that is “more like a bad term paper.” While DOE was given authority by Congress to propose rules to the FERC, something it has very rarely done, it is the FERC that must finalize the rules. In an October 30, 2017, telephone conference call, Peskoe criticized the present DOE effort as “poorly reasoned, devoid of evidence, astonishingly vague and legally deficient.” He pointed out that DOE failed to define the “resiliency” that nuclear power and coal plants would supposedly provide the grid for the FERC to base its determination. But Peskoe offered that the definition’s omission was not out of incompetence but strategic, “because if the document had defined resilience it would have been clear that fuel rods and coal piles are not the solution.” In fact, Peskoe commented, the DOE’s present pitch for  “resilience to me is a smokescreen. It's a smokescreen for a bailout” for economically failing coal plants and nuclear power stations.