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Nuclear and coal industries influenced Rick Perry to try to change regulations

Evidence Mounts That Coal, Nuclear Interests Influenced Perry’s Grid Resiliency Rule
The political pressures behind DOE’s request to d
eclare coal and nuclear power plants as vital to a reliable grid. GreenTech Media, JEFF ST. JOHN NOVEMBER 13, 2017 Energy Secretary Rick Perry’s effort to change federal energy regulations to favor coal and nuclear power plants in the name of grid resilience has received a barrage of criticism for misstating the facts, ignoring the evidence, and attempting to ram through a major disruption in interstate energy markets on an emergency timeframe.

While Perry insists the initiative is necessary to “rebalance the market” and “keep our families warm,” there’s mounting evidence the proposal was taken from an industry playbook.

The accelerated timeline for DOE’s notice of proposed rulemaking (NOPR) is outside of the norm for such a radical market shift, but it does match up with a major political ask from one of President Donald Trump’s key supporters in the coal industry: Robert Murray, CEO of Murray Energy.

Over the past week, new details have emerged linking efforts by the outspoken private coal company owner to obtain federal financial aid for the industry, as well as the DOE’s highly unusual decision in September to directly ask the Federal Energy Regulatory Commission for an emergency intervention in the country’s interstate energy markets.

The interests of Murray Energy run through FirstEnergy, the Ohio-based utility that’s facing near-term financial challenges in managing money-losing coal plants in the region served by grid operator PJM — the same region that would be most heavily hit by DOE’s proposal. As the Houston Chronicle noted in a Sunday article, more than 70 percent of Murray Energy’s coal delivered to U.S. power plants went to PJM.

And the timeline for FirstEnergy to seek relief is fast approaching.  In its third-quarter 2017 earnings report late last month, the company noted that it has cash on hand to fund operations through March 2018. But starting in the second quarter, with $515 million of maturing debt that will “likely to be difficult to refinance” coming due, and absent any moves by Ohio state regulators to re-regulate its plants, the company’s power generation division, FirstEnergy Solutions, may be forced to “restructure debt and other financial obligations with its creditors and/or seek protection under U.S. bankruptcy laws” — a move that could push FirstEnergy to do the same. …….

Appointees with long connections to Murray, FirstEnergy and coal industry

PUCO recently joined a long list of state regulators, former FERC commissioners, and other energy-sector insiders in coming out against the NOPR on the grounds that it will raise costs and prop up inefficient resources to the detriment of cheaper, less polluting alternatives. A collection of 14 different energy industry trade groups — ranging from wind and solar, to oil and natural gas — have argued that the NOPR’s proposed payments go beyond those provided to so-called “reliability must-run” power plants, amounting to a bailout to keep certain units running.

FERC has said it will vote on the NOPR in a December 11 meeting. Most observers, including former FERC members, don’t believe that FERC will be able to turn the vague NOPR document into a final rule by next month. But with coal industry allies playing major roles in the agencies tasked with reviewing and implementing the NOPR, opponents are worried that FERC could take some action to prop up coal plants in the short term, while leaving the NOPR’s larger challenges to a future date.

Longtime FirstEnergy lobbyist Sean Cunningham, now executive director of DOE’s office of energy policy and systems analysis, has been the sole DOE representative outside of Perry himself to speak publicly in support of the NOPR. In a debate last month, Cunningham repeated the assertion that coal and nuclear plants weren’t being valued properly and that failing to act on the NOPR could jeopardize grid reliability in the short term.

 Meanwhile, FERC acting chairman Neil Chatterjee, a Trump appointee and former aide to Senate Majority Leader Mitch McConnell (R-Ken), said last week that he’s working on an interim plan to “rescue” FirstEnergy’s ailing coal plants, based largely on the utility’s proposals in comments before FERC.

Chatterjee said he has met with FirstEnergy Corp. CEO Chuck Jones to “really kick the tires on what they proposed and challenge them on some of what they had put forward.” Under FirstEnergy’s plan, plants would receive a monthly payment from grid operators that fully offsets operation costs and includes a “fair return on equity.”


November 15, 2017 - Posted by | politics, USA

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