A conservative group with close ties to the Trump administration is slamming it for its "excessive" and potentially destructive proposal to provide coal and nuclear plants with incentives to prop up the industry.
The Department of Energy proposal is like "using a sledgehammer to swat a fly," the Institute for Energy Research said Wednesday in an analysis of the Trump plan. "Guaranteeing cost recovery for certain types of generation would destroy electricity markets. For obvious reasons, investors would immediately favor those investments where the government guarantees their returns."
The proposal was sent by Energy Secretary Rick Perry in a Sept. 29 letter to the Federal Energy Regulatory Commission, asking the independent grid regulator to begin an abbreviated rulemaking procedure to put the rules into effect as soon as possible. The rule would seek to provide electricity "resilience" fees to coal and nuclear plants that can provide up to 90 days of fuel onsite to maintain electricity production during times when the grid is damaged or under strain.
"Putting the government's finger on the scale in this way will increase costs and stifle innovation in new means of generation and delivery," the conservative group said. "What need is there to innovate and to offer more efficient or cheaper electricity if the government is guaranteeing returns for existing processes?"
The group's president, Thomas Pyle, led the Energy Department's transition team to establish the Trump administration's energy apparatus, which moved away from the the climate policies of the Obama administration to those that supported energy exports, nuclear power and coal.
"Secretary of Energy Rick Perry has clarified that he intended this proposed rulemaking as a means of starting a conversation, encouraging FERC to consider these resiliency issues in its decisions. To that extent, we support the underlying intent of the proposed rulemaking, even if its mechanism is unacceptable," the group said.