No New Life for Dying Technology: CUB Opposes White House’s Coal-Revival Plan

Earlier this month, in a statement from its Press Secretary, the Trump Administration announced plans to breathe life into a dying coal-fired electricity generation sector in the name of “resilience”. The White House is attempting to use authority it believes it holds under Section 202 of the Federal Power Act to guarantee cost recovery for coal plants. Section 202(c) allows the Department of Energy (DOE), in response to an emergency, to issue must-run orders for certain power plants. There is no such emergency, and coal plants continue to shut down nationwide due to economic considerations. The White House’s latest move is a last ditch attempt to revive a dying and increasingly irrelevant power generation source after the Federal Energy Regulatory Commission (FERC) unanimously denied a DOE petition to similarly revive the coal generation industry.

Due to expensive retrofits needed to comply with air quality standards, the continued boon of cheap renewable energy generation, and the widespread use of sophisticated retail energy markets that can balance utility systems with cheap and clean power, baseload fossil fuel generation is becoming less and less relevant. This is particularly true of coal-fired generating plants, which have been retiring at a rapid rate in recent years. Further, the reliability and resilience needs cited by the Trump Administration to revive coal and nuclear generation are unfounded, and have been addressed through the aforementioned retail markets, such as PJM in the northeast. Federal intervention into these sophisticated markets has the potential to skew market dynamics in a way that will lead to increased rates for customers.

CUB opposes the White House initiative for a variety of reasons. Subsidizing uneconomic coal plants will lead to higher rates. Customers have made it clear that they prefer a cleaner electricity generation mix. Continued investment in coal plants will saddle ratepayers with a risky generation source that is prone to unplanned outages. Perhaps chief among the reasons for CUB’s opposition is that the White House’s initiative is unsupportable from a legal or economic perspective. Would it make sense for the federal government to order music to be purchased on 8-track players rather than through electronic media? The same baseless rationale applies in the context of coal-fired generation.

CUB and allies worked hard to close PGE’s Boardman Coal Plant by 2020. In 2010 when we got the PUC and DEQ to agree to the Boardman closure, it was the first agreement to close a modern baseload coal plant. It gave PGE 10 years to prepare for Boardman’s closure. PGE recently signed contracts with BPA to provide hydro capacity to ensure that there are no reliability problems after Boardman closes down. To any extent that the federal government may attempt to subsidize the only remaining coal plant in the state, CUB will do everything in its power to ensure that does not occur. Why? It’s best for ratepayers, and it’s what we need to do to face the reality of climate change in the carbon constrained world we live in.

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