An energy policy think tank, whose political arm endorsed President Trump, is panning the administration’s proposal to mandate higher payments to coal and nuclear power plants.
The Institute for Energy Research’s Director of Policy Kenny Stein wrote Wednesday that the Department of Energy’s proposal is “excessive and unnecessarily distortive.”
The proposal, unveiled last month, asked the Federal Energy Regulatory Commission to require that electric grid operators pay power plants for their costs plus a fair return, as long as the plants have at least 90 days of fuel on-site, a quality only possible in coal and nuclear plants.
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Energy Secretary Rick Perry said the policy is needed for grid resilience, since coal and nuclear plants are closing down due to the economy.
Stein said grid resilience is a real concern, but Perry’s proposal is far from the best solution.
“Like using a sledgehammer to swat a fly, this rule would end up causing enormous destruction even if it also managed to provide more resilient baseload capacity,” he wrote. “Guaranteeing cost recovery for certain types of generation would destroy electricity markets.”
Stein’s criticism comes in addition to objections from numerous groups that could be hurt by the plan, including those representing renewables, some utilities and natural gas.
The think tank’s political arm, the American Energy Alliance, gave Trump its first political endorsement last July.
Tom Pyle, head of both groups, led Trump’s transition team for the Department of Energy, and some Trump political appointees at the Energy Department used to work for the groups.
Both groups have been supportive of most of Trump’s major energy policy decisions and generally push pro-fossil-fuel, free-market and conservative energy policies.
Perry said last week that his proposal was meant to spark a conversation on resilience, implying that the Federal Energy Regulatory Commission does not need to implement the exact policy he sent them.