State lawmakers want the public to pay to prop up coal

Lawmakers in Ohio are proposing to subsidize permanently two coal-fired plants.

CREDIT: AP Photo/Matthew Brown
CREDIT: AP Photo/Matthew Brown

As coal-fired power plants continue to shutter across the country, politicians at the local and federal level are trying increasingly desperate measures to keep the once-dominant fuel afloat.

In Ohio, legislators have proposed a bill that would permanently subsidize two coal-fired power plants, owned jointly by American Electric Power and other major electricity utilities in the state. The subsidies would guarantee income for the power plants, even when the cost of electricity was less than the cost of operating the plants.

Money from the subsidies would come directly from consumers, who would be charged higher rates to pay the plants’ guaranteed income. If the plants became profitable, the customers would receive a credit back for the amount that they paid.

The move has prompted criticism from environmental groups, which accuse politicians of forcing consumers to bear the costs of outdated technology.

“There is no need for these plants to stick around — and this would essentially charge customers significantly more,” Mark Kresowik, associate regional campaign director for Sierra Club’s Beyond Coal Campaign, told ThinkProgress. “Coal is uneconomic in the markets right now.”

Other companies are considering proposals to essentially tinker with the market forces that have been driving down coal consumption in the United States over the last decade or so. PJM, the grid operator for the mid-Atlantic and parts of the Midwest, has suggested changing the way that resource adequacy analyses are conducted, which are used to make sure that utilities and power plants have enough resources to generate and maintain power reliably. PJM has also suggested that power plants should be required to have fuel stored on-site, which would severely disadvantage forms of energy like wind and solar, which rely on the environment more than a set amount of on-site fuel.

At the federal level, Secretary of Energy Rick Perry is also attempting to prop up the coal industry with his department’s review of U.S. electricity-grid policies. As Dave Roberts at Vox points out, Perry’s review is intended to examine whether baseload power plants are being unfairly pushed off the grid — and whether losing baseload power plants would threaten grid reliability.

Roberts points out a number of ways in which the review is flawed, from the man in charge of running it (Travis Fisher, who used to work at the Institute for Energy Research, a “free market think tank”) to the fact that a similar review has already been conducted by the National Renewable Energy Laboratory (NREL). That review found that the U.S. grid could accommodate operating on up to 80 percent renewable energy without threatening grid reliability.

“Whats become clear over the last few years is that wind and solar and other resources are cheaper than coal,” Kresowik said.

Ultimately, whether operators like PJM are allowed to put their fingers on the scales of market forces will be up to the Federal Energy Regulatory Commission. Both of Trump’s nominees to FERC — which has been without a quorum since February, and therefore unable to issue any regulatory decisions — are set to have their confirmation hearings before the Senate Energy and Natural Resources Committee. Both nominees oppose the Clean Power Plan, and one — a former Pennsylvania regulator — has suggested that pipeline protesters are engaged in a “jihad” against natural gas companies.

“The hearings that are happening tomorrow are very important to the future of what is going to happen here,” Kresowik said. “It’s a question of whether FERC will protect customers, or will they discriminate against new clean resources and be unduly preferential to these inflexible, uneconomic coal plants?”