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Perry proposes law to force Americans to buy dirtier, costlier power

Perry proposes law to force Americans to buy dirtier, costlier power

Energy Secretary ignores his own grid study to make good on his threats to punish renewables

In a brazen move, Energy Secretary Rick Perry has ignored the findings of his own grid study and proposed a new federal rule that would effectively force Americans to buy dirtier, more expensive power.

The Department of Energy (DOE) announced Friday morning that Perry has “formally proposed that the Federal Energy Regulatory Commission (FERC) take swift action to address threats to U.S. electrical grid resiliency.” FERC oversees the U.S. grid and regulates interstate electricity transmission.

To make his case, Perry has fabricated an economic threat to U.S. grid reliability from cheap renewables and then proposed a rule to account for the imaginary reliability benefit of other electricity sources — all the while ignoring the actual health and environmental costs of carbon pollution from burning coal that aren’t priced in to the market yet.

Perry is trying “to essentially end competition in U.S. power markets in order to force customers to pay billions of dollars for uneconomic coal and nuclear plants they don’t want or need,” Mark Kresowick, an expert on FERC rules, told ThinkProgress. Kersowick called the move “unprecedented.”

In the notice of proposed rule-making, Perry says FERC should “issue a final rule requiring its organized markets to develop and implement reforms that would fully price generation resources necessary to maintain the reliability and resiliency of our nation’s grid” within 60 days. FERC is an independent commission and not obligated to take up Perry’s proposal.

In the simplest terms, Perry wants to stop cheaper, cleaner renewables like solar and wind from shutting down more dirtier and more expensive plants like coal (and nuclear).

This is an especially brazen move because Perry’s own grid study, the one he asked DOE staff for back in April, totally undercuts any rationale for such a move. That study concluded that renewables have not harmed grid reliability and that myriad strategies exist to allow deep penetration of renewables.

In fact, the leaked draft of the staff report (before political appointees were able to massage it) had actually pointed out that “the power system is more reliable today”– even with far greater use of renewables — and that “high levels of wind penetration can be integrated into the grid without harming reliability.”

Even the final version of the study, which was cut back, found that renewable energy “performs a price stabilizing roll” and can “improve the month-to-month manageability of customer bills.” But Perry apparently doesn’t want US consumers to enjoy stable prices.

Perry’s move is also brazen because it is an attempt to literally fight the future. All the other major countries in the world are shifting towards renewables (see chart).

Bloomberg New Energy Finance chair Michael Liebreich reported on the remarkable surge in non-hydro renewables around the world in his “state of the clean energy industry” keynote last week at BNEF’s Future of Energy Summit in London.

As you can see from the chart, while the United States has tripled the penetration of new renewables from 3 percent to 9 percent in the past decade, Japan is at 12 percent, the UK is at 25 percent and Germany is at 29 percent. These are, respectively, the world’s third-largest, fifth-largest. and fourth-largest economies. Even China has more renewables than we do.

Significantly, Germany has one of the most reliable electric grids in the world, with 10 times fewer minutes of grid outages a year than the United States. In the morning of May 8, 2016, a whopping 95 percent of Germany’s electricity was provided by renewables.

Somehow, the U.S. needs “swift action” to address the imaginary problems associated with a mere penetration of new renewables of 9 percent.

 Energy Secretary Rick Perry. CREDIT: AP/Eduardo Verdugo

Energy Secretary Rick Perry. CREDIT: AP/Eduardo Verdugo

Source: Think Progress



Top U.S. Energy Regulator Resists Call to ‘Blow Up’ Electricity Markets With Coal, Nuclear Subsidies

The Hill:

FERC Chairman Neil Chatterjee, whose agency would be responsible for implementing Perry’s plan, told reporters Friday that he would not put in place a policy stemming from the proposal if it would “blow up” competitive electricity markets or not withstand court challenges.

Chatterjee’s comments were the first time he has weighed in on Perry’s proposal from last month.

Perry’s plan, officially made in the name of ensuring a resilient electric grid, has rocked the energy world amid charges that it would dramatically overhaul how electricity is sold. It would require that electric grid operators pay coal and nuclear plants for their costs and a fair rate of return if they have 90 days of fuel on-site.

Chatterjee was cautious in commenting on the proposal, and did not fully commit to supporting or opposing any particular action.

“I’m sympathetic to some of the things that Secretary Perry has raised,” Chatterjee said at FERC’s Washington headquarters.

“This idea that there are perhaps attributes that certain generating sources have that have values that are not appropriately being captured by our existing market structure. We need to look at that carefully and examine that and make a determination on whether changes need to be made to continue to enhance the market structure that we have,” he continued.

“I also believe strongly in markets,” he said. “We’ve invested nearly two decades and billions upon billions of dollars in our existing market structure, and I don’t want to do anything to disrupt that market structure. And I also want to ensure that whatever steps the commission takes withstand legal scrutiny and are legally viable.”

Chatterjee, a Republican native of coal-heavy Kentucky who previously was Senate Majority Leader Mitch McConnell’s top energy adviser, said that he’s confident FERC can write a regulation that helps the grid “in a legally defensible manner that doesn’t blow up markets.”

But it may not look much like Perry’s original proposal.

He went on to say that he isn’t even certain that there is a resilience problem with the electric grid that needs FERC action, but he’s committed to using FERC’s processes to figure that out.

“Reliability is not an issue today,” he said. “We have to look at the long term. I think valuing resilience is an extension of reliability, and we have to look to the long term. We don’t know what the future’s going to hold.”

More: Energy commission head ‘sympathetic’ to parts of proposal to prop up coal, nuclear


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