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Perry proposes law to force Americans to buy dirtier, costlier power

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ThinkProgress

U.S. Energy Secretary Rick Perry waves as he departs from a joint statement with his Mexican counterpart, in Mexico City, Thursday, July 13, 2017. (AP Photo/Eduardo Verdugo)

U.S. Energy Secretary Rick Perry waves as he departs from a joint statement with his Mexican counterpart, in Mexico City, Thursday, July 13, 2017. (AP Photo/Eduardo Verdugo)

In a brazen move, Energy Secretary Rick Perry has ignored the findings of his own grid study and proposed a new federal rule that would effectively force Americans to buy dirtier, more expensive power.

The Department of Energy (DOE) announced Friday morning that Perry has “formally proposed that the Federal Energy Regulatory Commission (FERC) take swift action to address threats to U.S. electrical grid resiliency.” FERC oversees the U.S. grid and regulates interstate electricity transmission.

To make his case, Perry has fabricated an economic threat to U.S. grid reliability from cheap renewables and then proposed a rule to account for the imaginary reliability benefit of other electricity sources — all the while ignoring the actual health and environmental costs of carbon pollution from burning coal that aren’t priced in to the market yet.

Perry is trying “to essentially end competition in U.S. power markets in order to force customers to pay billions of dollars for uneconomic coal and nuclear plants they don’t want or need,” Mark Kresowick, an expert on FERC rules, told ThinkProgress. Kersowick called the move “unprecedented.”

In the notice of proposed rule-making, Perry says FERC should “issue a final rule requiring its organized markets to develop and implement reforms that would fully price generation resources necessary to maintain the reliability and resiliency of our nation’s grid” within 60 days. FERC is an independent commission and not obligated to take up Perry’s proposal.

In the simplest terms, Perry wants to stop cheaper, cleaner renewables like solar and wind from shutting down more dirtier and more expensive plants like coal (and nuclear).

This is an especially brazen move because Perry’s own grid study, the one he asked DOE staff for back in April, totally undercuts any rationale for such a move. That study concluded that renewables have not harmed grid reliability and that myriad strategies exist to allow deep penetration of renewables.

In fact, the leaked draft of the staff report (before political appointees were able to massage it) had actually pointed out that “the power system is more reliable today”– even with far greater use of renewables — and that “high levels of wind penetration can be integrated into the grid without harming reliability.”

Even the final version of the study, which was cut back, found that renewable energy “performs a price stabilizing roll” and can “improve the month-to-month manageability of customer bills.” But Perry apparently doesn’t want US consumers to enjoy stable prices.

Perry’s move is also brazen because it is an attempt to literally fight the future. All the other major countries in the world are shifting towards renewables (see chart).

bnef-renewable-penetration1

Bloomberg New Energy Finance chair Michael Liebreich reported on the remarkable surge in non-hydro renewables around the world in his “state of the clean energy industry” keynote last week at BNEF’s Future of Energy Summit in London.

As you can see from the chart, while the United States has tripled the penetration of new renewables from 3 percent to 9 percent in the past decade, Japan is at 12 percent, the UK is at 25 percent and Germany is at 29 percent. These are, respectively, the world’s third-largest, fifth-largest. and fourth-largest economies. Even China has more renewables than we do.

Significantly, Germany has one of the most reliable electric grids in the world, with 10 times fewer minutes of grid outages a year than the United States. In the morning of May 8, 2016, a whopping 95 percent of Germany’s electricity was provided by renewables.

Somehow, the U.S. needs “swift action” to address the imaginary problems associated with a mere penetration of new renewables of 9 percent.

Source: ThinkProgress. Reproduced with permission.

  

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  • George Darroch

    Their loss. (Well, our loss, but Australia is hardly in a position to point fingers.)

  • Adam Lucas

    I doubt the FERC will back Perry’s dumb ideas. His own home-state of Texas has the highest penetration of wind power in the US, a situation which he helped bring about as governor, even though he’s clearly no friend to renewables – the arguments were always made to him on the basis of price and grid reliability with no subsidies.

  • jm

    This is how capitalism works – so I wouldn’t bet that the proposal will get turned down….

    • Pixilico

      Our current state of capitalism: where the out-of-control financial tail wags the productive capitalist dog. Perry just fulfills the role of hit man, hired precisely to carry out the dirty job (literally speaking). The way present-day capitalism is working can only lead to an environmental catastrophe that’ll wipe most life out of existence much sooner than we can predict.

      • jm

        yep, there is too much faith in rational markets from pro-renewable people, but the fossil fuel companies will make sure the markets are favourable for them.

        • Pixilico

          A collateral damage from the junk economics taught around the world. Most people just don’t realise how brainwashed they’ve been.

  • neroden

    Several groups have stated outright that they are certain this is illegal and will sue, so in the unlikely event that a regulation is actually issued, it will be enjoined in court *immediately*.

  • RobertO

    I wonder how long before the COALition uses this briliant idea in Australia. Capacity payment to coal to keep them working when they are bleeding money which may happen quicker than we all think.