Sept. 29, 2017

U.S. Chamber of Commerce Joins Rogues' Gallery of Corporate Lobbyists Attempting to Hijack U.S. Electric Grid Through Radical Rulemaking

Statement of Tyson Slocum, Director, Public Citizen’s Energy Program

Note: Today U.S. Energy Secretary Rick Perry directed the Federal Energy Regulatory Commission (FERC) to undertake a rulemaking to radically remake America’s power markets by subsidizing uneconomical nuclear and coal power plants that can no longer compete with natural gas or renewable energy. Perry falsely claims that wholesale power markets, regulated by FERC, are underpricing coal and nuclear plants by failing to properly value their true contributions to grid reliability. As justification for this position, Perry cites a flawed study funded by three trade associations representing the coal and nuclear industries: Edison Electric Institute, Nuclear Energy Institute and the U.S. Chamber of Commerce. Public Citizen’s Energy Program Director Tyson Slocum is testifying before the U.S. House Energy and Commerce Committee on Thursday, Oct. 5 about these issues.

As Public Citizen explained to FERC in comments filed in June, nuclear and coal units have been rendered wasteful and inefficient because developments in energy markets – low-cost and flexible renewables, flatlining power demand and inexpensive natural gas – have made them too costly and obsolete. It is an abomination for the U.S. Department of Energy (DOE) to demand that consumers now pay to keep these nuclear and coal power plants operating for some phantom, purported “resilience” benefit. The fact remains: Neither coal nor power plants provide any such resilience benefit for the U.S. electric grid. Therefore, consumers must not be expected to pay. Compounding the harm to consumers, subsidies for coal would only deepen the climate crisis, which threatens untold damage to our health and the economy. To continue subsidizing coal and nuclear is to waste funds that could be used to make a quicker transition to 100 percent clean, reliable and cheap renewable electricity.

For a decade and a half, Public Citizen has raised concerns about the inadequacy of FERC’s market-based rate experiment and the creation of Regional Transmission Organizations (RTO) to deliver “just and reasonable” rates to consumers. There are several flaws in the wholesale energy markets, but most of them involve precisely the opposite of what Secretary Perry is suggesting: FERC has been permitting big utilities, through the RTOs, to rig wholesale markets to fleece consumers and create unfair artificial barriers to renewables. The solution is wholesale power market reform – not to waste money on life support for power plants that are obsolete, dangerous, unnecessary and unable to compete in the market.

Finally, this is the height of hypocrisy for President Donald Trump, who has attacked public health and safety regulations by falsely claiming they kill jobs by intruding on the free market. But this DOE rulemaking aims to overturn markets and picks losers (the coal and nuclear industries) to be new beneficiaries of cost-of-service regulation.

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