America’s energy sector has reached an interesting crossroads. After eight years of the Obama Administration working to dismantle the nation’s coal fleet, the Trump Administration has swept into office and upended the apple cart. Earlier this year, Energy Secretary Rick Perry commissioned a study to assess the health of America’s power grid. His subsequent report noted a sizable decline in America’s “baseload” power, and urged steps to improve the reliability of the nation’s electric grid.
Overall, the Trump Administration is advocating an “all of the above” mix for the nation’s power sector. And this is an eminently sensible position. But in attempting to secure the nation’s power grid, Secretary Perry is now facing criticism because he’s chosen to prioritize reliable, practical power generation over political expediency.
Significantly, America’s electric grid depends on a bulwark of baseload power to continuously meet the daily operational needs of the entire nation. For decades, this massive lift has been undertaken by coal and nuclear plants. However, America has lost an unprecedented amount of baseload capacity in recent years. Since 2010, 66 gigawatts of coal capacity has disappeared—enough electricity to power 40 million homes. And by 2020, an estimated 80 gigawatts of coal capacity will have been shut down.
No doubt, rising natural gas production and a decade of crippling federal regulations have served to eliminate a substantial portion of America’s coal fleet. And bankruptcies and cost overruns have simultaneously hampered replacements for an aging nuclear industry.
But in response to such a stark problem, Secretary Perry has proposed that the Federal Energy Regulatory Commission (FERC) allow some power plants to recover the cost of storing on-site fuel. Such fuel storage allows power stations to run non-stop during extreme weather. Typically, America’s utilities give priority to the lowest-cost energy option for power transmission. But Perry is urging a pricing mechanism that would value these plants for their ability to continually provide power during disruptive events like massive storms and frigid winters.
Coal and nuclear plants would benefit from such a revision—since they maintain lengthy fuel supplies, and can typically remain in operation despite weather challenges. In contrast, natural gas plants can falter during interruptions in pipeline service. And much-touted solar panels and wind turbines are particularly vulnerable to storm impacts—and only function when the sun shines and the wind blows.
The bottom line is that coal and nuclear plants still produce 50 percent of the nation’s electricity. It’s a significant—but declining—share of the energy needed to ensure reliable electricity. Thus, Secretary Perry is simply taking a very real-world approach to a burgeoning problem.
Fortunately, other steps are underway to help secure America’s electricity supply. EPA Administrator Scott Pruitt’s has announced a repeal of the Clean Power Plan (CPP), which would likely spare the premature retirement of more coal-fired plants that already employ stringent emissions controls while providing 24/7 electricity.
Polling shows that 70 percent of voters favor a diverse mix of fuel sources to maintain grid reliability and affordable power. So rather than simply take coal and nuclear power plants offline, the Trump Administration can support a more reliable electric grid by encouraging upgrades to existing facilities. These are important considerations for the coming decades, when an ever-growing nation will look to keep powering its schools, hospitals, and infrastructure. Secretary Perry is right to help ensure a continuation of the reliable and affordable power that undergirds America.
Terry M. Jarrett is an energy attorney and consultant who has served on both the National Association of Regulatory Utility Commissioners and the Missouri Public Service Commission.
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- On October 20, 2017