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Trump Makes Few Friends with Scheme to Subsidize Coal, Nuclear

Opponents argue proposal is unworkable and unlawful, could drive up consumer energy bills

artificial island
PSEG Power's nuclear generating facility on Artificial Island

A wide segment of the energy sector, most of the nation’s top environmental organizations, and consumer advocates yesterday trashed a Trump administration proposal to revive the nation’s nuclear and coal sectors with new subsidies.

In comments to the Federal Energy Regulatory Commission, opponents derided the recommendation by the Department of Energy as unworkable, unlawful, and so disruptive to the existing competitive energy marketplace that it would raise bills to consumers.

The proposal, being fast tracked at an unprecedented pace according to its critics, is touted by the administration as enhancing the reliability of the nation’s electric grids by paying coal and nuclear units more for the power they produce.

Both coal and nuclear power plants face economically challenging times as cheap natural gas has undercut the former’s ability to prosper in a competitive marketplace, leading to premature closing or threats to retire units providing the bulk of the power to grids.

It is a dilemma confronting Public Service Enterprise Group, the operator of three nuclear units in South Jersey. Its top executive has warned the plants could close without the kinds of financial incentives other nuclear units have received in New York and Illinois.

When the proposal was initially unveiled, Ralph Izzo, chairman, CEO, and president of PSEG, said the company had long pressed for a national policy that “recognizes the valuable benefits that nuclear power provides to our customers.’’

Critics of the proposal, advanced by Energy Secretary Rick Perry, however, argue the effort would “prop up uneconomic generation that is unable to compete … and that is not otherwise needed for reliability,’’ according to joint comments submitted by a dozen energy associations representing oil, natural gas, wind, solar, and other technologies.

The criticism from prominent environmental organizations like the Natural Resources Defense Council, Environmental Defense Fund, Sierra Club, and others, described the proposal as a “transparent attempt to reward a political ally through a generous and perpetual bailout.’’ The proposal “can only be understood as an effort to prop up the coal industry in the Administration’s political pledge to revive it.’’

Earlier in the day, in a press conference, Andy Ott, the president and CEO of PJM Interconnection, the nation’s largest power grid, called the proposal unworkable and probably “contrary to law.’’

In comments submitted later in the day, PJM argued the organization is addressing reliability problems already and that they are best addressed through changes in pricing in the competitive marketplace.

The Joint Consumer Advocates of the PJM region agreed, arguing the proposal put forward by DOE would likely mean higher electricity prices for end-use customers. The JCA comprises consumer advocates of several states within PJM, including the New Jersey Division of Rate Counsel.

“It is a solution in search of a problem and it is unnecessary,’’ the JCA concluded, adding it would pose serious financial harm to consumers without improving the reliability of the existing grid.

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