During a hearing before the House Energy and Commerce Committee’s Energy Subcommittee on Thursday, Secretary of Energy Rick Perry tried to defend his decision to propose a new federal rule that would essentially boost revenue for coal and nuclear power plants as “starting a conversation.”
The rule calls for subsidies for power plants that keep at least 90 days worth of fuel stored on site — something the Columbia Center on Global Energy Policy has found would “unarguably increase costs to consumers” by propping up power plants that aren’t economically viable at consumer expense.
Proponents of coal and nuclear energy often argue that these sources are much cheaper than alternatives like wind and solar, though Perry could not definitively say the Department of Energy had conducted any analyses that measured the proposed rule’s potential impact on consumers.
“Did you measure the cost to consumers?” Rep. Paul Tonko (D-NY) asked during the hearing.
“I think you take costs into account, but what’s the cost of freedom?” Perry responded. “What’s the cost to keep America free?”
Throughout the hearing — which stretched over two hours — Perry also repeatedly defended the proposed rule by arguing that it was merely a chance to create a conversation about grid reliability and resiliency.
“I hope what we can agree… the [Notice of Proposed Rulemaking] I put forward was a way to kick-start a national discussion about resiliency and reliability about the national grid,” Perry told Rep. Bobby Rush (D-IL). “We’re having this conversation now that we haven’t had in this country.”
Despite claims that the proposed rule was meant to spark conversation about issues of grid resiliency and reliability, Perry has asked the Federal Energy Regulatory Commission to issue a final rule within 60 days, including a 45-day public comment period.
Rep. Mike Doyle (D-PA) criticized Perry’s statement that his letter had kicked off a conversation about reliability and resliency, citing eight different hearings that the subcomittee had held on the subject.
“We have actually been having the conversation you are taking credit for starting,” Doyle said.
Doyle also questioned the difference between Perry’s statements before the committee — suggesting that the proposed rule is meant to simply start a conversation — and the text of the proposed rule, which directs FERC to issue a final rule.
“You say you want a conversation, but you’re ordering FERC to make big changes within 60 days,” Doyle said, noting that the proposed rule uses the word “must” 12 times. “Which is it?”
“My words are what my words are,” Perry responded. “It is both. It can be both. We can have a conversation, and I think they must act.”
Beyond arguing that the proposed rule would kick off both an important conversation and prompt necessary action (action that runs counter to the findings of the grid study that Perry requested in April, which found that renewables have not harmed grid reliability), Perry struggled to defend his reasoning behind issuing the notice of proposed rule-making. When asked by Rush for concrete evidence that the proposed rule would in fact improve grid resiliency and reliability, Perry suggested that he is pursuing the rule based on his own personal experience, not specific studies or analyses.
“Your life experiences inform you about future events, and this is a great example of it,” Perry said, going on to explain that his concept of grid reliability was informed by a series of blackouts that occurred in Texas when he was governor. “One of the things as an elected official I never wanted to have to explain to anybody is why we didn’t have the vision to put into place… a resilient power system.”
According to an investigation by the Dallas Morning News, the rolling blackouts that Perry was citing — which happened when some 50 power plants were knocked off the grid by a winter storm in 2011 — some outages were in fact coal-fired power plants that automatically shut down when the cold weather interfered with the plants’ motioning systems.
Noting that market dynamics “completely contradict” the spirit of the proposed rule, Rep. Frank Pallone (D-NJ) also tried to press Perry on specific studies or analyses that informed his proposal, going so far as to submit a letter requesting Perry detail the meetings that took place in proposing the rule. Again, Perry deflected, turning to the issue of starting a conversation about energy resiliency.
“My point with this is I want to drive this conversation… this has been talked about a lot, but there hadn’t been any action,” Perry said. “I want to try to push the FERC and country to take action so that we don’t face that event in the future where people’s lives are put in jeopardy or where this country’s national security is jeopardized because we refuse to buy into the concept that we need a very diverse energy portfolio.”
Perry also suggested that he was fine with the federal government subsidizing energy production, arguing that the government already subsidizes a number of energy sources, from wind to oil and gas, and the challenge is making “it as far as you can.” He also compared wind and solar subsidies to his children, arguing that “once they got out of college, they are on their own” — apparently in reference to renewable tax credits such as the Investment Tax Credit for solar and the Production Tax Credit for wind that have helped fuel the growth of renewable energy in recent years.
Perry did not broaden the analogy to include coal, which has been used as a power source in this country for nearly two hundred years. The coal industry continues to benefit from the federal coal leasing program, which allows companies to under-compensate taxpayers for coal mined on federally-owned lands. The Obama administration had begun a systematic review of the program last year, but that effort was terminated by the Trump administration in March.