Energy Secretary Rick Perry is taking steps to make sure that struggling coal and nuclear power plants don't close prematurely, in the Trump administration's latest effort to bolster energy jobs.
Perry issued a memo late Friday directing his chief of staff to begin a 60-day review of how regulations, tax policy and the federally overseen electric markets, which incentivize power plant development, may be forcing coal and other power plants to close faster than expected.
"We are blessed as a nation to have an abundance of domestic energy resources, such as coal, natural gas, nuclear and hydroelectric, all of which provide affordable baseload power and contribute to a stable, reliable and resilient grid," Perry said in a memo obtained by Bloomberg, which was sent to his chief of staff, Brian McCormack.
Perry added that experts have "highlighted the diminishing diversity of our nation's electric generation mix and what that could mean for baseload power and grid resilience." Baseload power plants are able to provide electricity around the clock, with limited interruptions. In contrast, wind and solar power are deemed intermittent because they are unable to provide electricity without interruption in a single 24-hour period.
The study comes as states struggle to find the right policies to keep their nuclear power plants from closing, as the low cost of natural gas continues to out-compete many older forms of baseload power, such as coal and nuclear.
The Federal Energy Regulatory Commission, which oversees the electric grid as the nation's energy watchdog, is being looked at to solve many of the problems. But the federal commission is without a quorum and is waiting for President Trump to name new appointees to replenish the five-member panel. The watchdog has only two members left on the commission, which forced it to stop much of its decision-making responsibilities until it gets at least a third member.
The nuclear and coal industries want the commission to reassess how coal and nuclear plants are being compensated to ensure the grid remains stable amid the growing use of renewable energy. The coal industry doesn't want the market to unfairly favor natural gas without fully recognizing the benefits that coal plants bring to the electric grid, including improved reliability and resilience.
Perry wants to know if the wholesale markets are adequately compensating coal and nuclear plants for their attributes, according to the memo.
The memo was ordered just days after the American Coalition for Clean Coal Electricity, representing coal power plant owners, sent a letter to the largest grid operator that FERC oversees, PJM Interconnection, asking it to clarify coal's role in the grid after a study was released showing that natural gas could meet nearly 90 percent of demand.
"Some might have misinterpreted the report as endorsing an unprecedented increase in natural gas-fired generation — specifically, an increase of up to 86 percent gas-fired generation if all coal-fired and nuclear generation in PJM retired — and, thereby, discounting the crucial role coal-fired generation should play in the future to ensure reliability, resilience and fuel diversity," the letter from the coal group read.
It wants PJM, which operates the grid in the Northeast and Mid-Atlantic, to define what roles PJM and FERC will play in developing criteria that account for coal's benefits, especially given the possibility of disruptions in natural gas supply.
At the same time, coal state Republicans on Capitol Hill were praising the news of Perry's plan to re-evaluate the value of baseload power plants.
"If we are going to have affordable, reliable energy that powers our economy and advances our quality of life, we must maintain an adequate supply of baseload electricity that is always available when it is needed," Sen. Shelley Moore Capito, R-W.Va., said Monday.
"There is a role for multiple energy sources, including our own West Virginia coal and natural gas, as well as nuclear and renewables. But there is a clear difference between intermittent energy sources and baseload power," she said.