Broad coalition and grid operator: Markets are working, there is no emergency

News circulated today of a draft plan the administration is considering to bail out certain uneconomic and outdated coal and nuclear plants. A broad coalition representing many different energy sources responded, and the most affected grid operator weighed in as well.

Here’s a roundup of what people are saying:

PJM Interconnection

“Our analysis of the recently announced planned deactivations of certain nuclear plants has determined that there is no immediate threat to system reliability. Markets have helped to establish a reliable grid with historically low prices. Any federal intervention in the market to order customers to buy electricity from specific power plants would be damaging to the markets and therefore costly to consumers. There is no need for any such drastic action.
PJM just released the results of its capacity auction, which secured reliable supplies through 2021/2022. The auction results saw an increase in the amount of coal resources that cleared the market, along with a diverse mix of natural gas generation, nuclear generation, renewable resources, demand response and energy efficiency. The PJM electrical grid is more reliable than ever, with 23 percent reserve margins and billions of dollars of new investment…”

Amy Farrell, American Wind Energy Association Senior Vice President for Government and Public Affairs

“Independent energy regulators, grid operators and other experts have gone on the record to declare that orderly power plant retirements do NOT constitute an emergency for our electric grid. Infrastructure and processes are already in place to ensure that remains the case. The reported proposal would be a misapplication of emergency powers, there’s certainly no credible justification to force American taxpayers to bailout uneconomic power plants.”

Todd Snitchler, American Petroleum Institute Market Development Group Director (API)

“The Administration’s draft plan to provide government assistance to those coal and nuclear power plants that are struggling to be profitable under the guise of national security would be unprecedented and misguided…

[U]nprecedented government intervention in the energy markets to support high cost generation will put achieving [energy dominance] in jeopardy and hurt customers by taking more money out of their pockets rather than letting people keep more of what they earn – a key priority of this administration.”

John E. Shelk, President and CEO, Electric Power Supply Association (EPSA)

“There was no emergency when coal and nuclear interests sought federal relief and there is none today that justifies such unprecedented Executive Branch intervention in the economic life of the country. The economic consequences are profound for power suppliers and consumers.”

Dena E. Wiggins, Natural Gas Supply Association President and CEO (NGSA)

“Propping up aging and uneconomic power plants through the Defense Production Act, the Federal Power Act or other unnecessary federal intervention is a short-sighted action that drives up customer costs and undermines well-functioning power markets. It is an inappropriate use of the federal government’s emergency powers that is even more egregious when even the regional power grid authorities at PJM say there is no emergency.”

Malcolm Woolf, Advanced Energy Economy Senior Vice President of Policy (AEE)

“The Administration’s plan to federalize the electric power system is an exercise in crony capitalism taken solely for the benefit of a bankrupt power plant owner and its coal supplier. It would be a command-and-control mechanism that fundamentally disrupts and undermines the competitive electricity markets that have improved our electricity system’s reliability, resilience, and affordability, while fostering innovation. As has been well established – by FERC, by grid operators, by industry experts – there is no emergency that would justify propping up uneconomic power plants that are superfluous in an over-supplied region. The Administration’s plan to alter competitive electricity market outcomes through the use of narrow emergency authorities crafted by Congress to protect the nation from true imminent threats to electric reliability is wholly unprecedented and legally indefensible.”

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