Energy Secretary Rick Perry said Thursday that the Energy Department is working on releasing a cost estimate for its proposed bailout of struggling coal and nuclear plants, but he does not know the price of the plan.
“We don’t have a dollar estimate at this point in time,” Perry said in response to a question at the World Gas Conference. “A piece of work is being done hopefully in the not-too-distant future.”
But Perry reiterated his national security rationale for subsidizing failing coal and nuclear plants, which he says outweighs higher bills for customers.
“It’s not a dollar figure you can count,” Perry said. “You cannot put a dollar figure on the cost to keep America free, to keep the lights on.”
A leaked Energy Department draft memo proposes using two federal laws focused on emergencies and wartime needs to save coal and nuclear power plants set to retire soon.
The department would subsidize select coal and nuclear plants for two years, using executive authority under emergency provisions of the Federal Power Act and the Defense Production Act.
The Energy Department argues using the laws is justified because coal and nuclear plants, which can store fuel on-site and run around-the-clock, offer a protection of fuel security that the nation’s power grid needs during extreme weather or other major disruptions.
Operators of the power markets have rallied against the Energy Department’s plan, noting that competition from cheap natural gas and renewables has kept electricity prices low.
PJM Interconnection, operator of the largest wholesale power market in the U.S., has emphasized any federal intervention “would be damaging to the markets and therefore costly to consumers” by raising electricity prices. Moody’s determined this month that electricity customers would see their rates rise if Perry moves forward with the plan.
Some experts also doubt the Trump administration’s national security rationale for helping coal and nuclear plants.
Less than 1 percent of all major power disruptions over the past five years were caused by fuel supply problems, according to a recent independent study by the Rhodium Group research firm. The vast majority were the result of severe weather knocking down power lines.
