FERC rejected Perry’s plan, but coal and nuclear are still asking for bailouts

This is set to be the year that America decides if it values clean, affordable energy or political cronyism in its electricity markets.

TheFederal Energy Regulatory Commission’s (FERC) recent rejection of Secretary of Energy Rick Perry’s plan to force electricity customers across the country to pay billions of dollars to prop up uneconomic coal and nuclear plants is only the tip of the iceberg in the fossil fuel industry’s bailout efforts.

{mosads}Today, there are still numerous proposals making their way through state legislatures, public utility commissions, electric market operators, and Congress that will unfairly prop up fossil fuel plants that can’t compete in America’s modern energy markets.

These proposals are rooted in the entitled belief by fossil fuel billionaires that any competition that outperforms their lumbering, polluting power plants — especially clean energy resources like solar, wind, and energy efficiency — is somehow illegitimate.

The proposals themselves have gotten traction recently because over the past decade, clean energy resources have displaced hundreds of coal and nuclear plants as American customers have steadily cut down on their electricity usage and demanded cleaner, safer energy at a lower cost. As a consequence, these new resources have also created a vibrant clean energy economy that employs hundreds of thousands of workers.

Fossil fuel billionaires are fearful that this trend will create a permanent shift away from their dirty and dangerous energy, and are subsequently trying to force electricity customers to pay hundreds of millions, and sometimes billions, of dollars to prop up their plants.

The most egregious example of this political cronyism was Perry’s directive to FERC to create new rules that would have forced electricity customers to pay extra money for the energy produced by uneconomic coal and nuclear plants.

This expensive, foolish directive was rejected by FERC. Despite its failure, however, there are still numerous other proposals which are not as well publicized, but equally costly attempts by fossil fuel billionaires to prop up their plants.

Washington energy lobbyists, for example, have already been busy pushing coal tax credits and the extension of nuclear industry tax incentives in this year’s spending packages.

In Indiana, Sierra Club caught the state’s public utility commission approving a massive bailout of two coal-burning power plants for a local utility, NIPSCO, and is considering legal action to overturn it. The bailout came after uncontested NIPSCO data was revealed which showed that retiring the plants, instead of bailing them out, would save customers as much as $420 million.  

In Ohio, FirstEnergy has tried for years, and is still trying, to get the state government to bail out its obsolete coal and nuclear plants that can’t compete with the Midwest’s legion of wind farms. Consumer and environmental advocates have defeated this bailout multiple times, but the utility keeps coming back to try again.

In the Great Plain states, reports show that throughout the region, utilities have been taking advantage of loopholes to force customers to bail out local coal plants to the tune of $300 million over a two year period in the Southwest Power Pool, home to abundant cheap wind power.

Electricity markets that are supposed to be competitive and open to all resources aren’t immune from efforts to rig the system against cleaner energy.

For example, on the same day FERC rejected Energy Department’s misguided proposal, New England’s market operator filed a proposal that would obstruct states’ rights to pursue cost-effective renewable energy projects and make it easier to prop up dirtier, costly power plants that should retire. PJM, which manages the electric system for much of the Mid-Atlantic and Midwest, has also threatened to override public policies for clean energy in order to raise consumer costs and bail out unnecessary power plants, despite a massive surplus of electric capacity.

This recent, ongoing wave of proposals to bailout coal and nuclear plants on behalf of billionaires is a very real threat that will stifle innovation, increase costs, and corrupt democratic processes that have served us well for decades.

The backlash against these bailouts has been overwhelming thus far, but it will only be effective if it can stop all of them in their tracks. A reliable, affordable, and clean energy future hangs on the decisions we make in 2018 and we must choose our decisions wisely.

Mary Anne Hitt is the director of Sierra Club’s Beyond Coal campaign.