Financially Strapped Energy Companies Push Hard For $65 Billion To Prop Up Coal
Two of the country’s largest and most financially indebted energy companies are lobbying Congress to enact a massive, decade-long, tax credit for struggling coal producers, according to a report Monday from Axios.
Arch Coal and Peabody Energy, both of whom filed for bankruptcy last year, are joining a coalition pushing Congress to pass a $6 billion a year credit for the coal and nuclear energy industry that could last 10 years. The credit, if passed, could cost nearly $65 billion over the course of a decade.
“Frankly, this is a novel idea to people who are used to nuclear tax credits and renewable tax credits,” Paul Bailey, CEO of American Coalition for Clean Coal Electricity (ACCCE), told reporters. “They’re used to all kinds of tax incentives and credits, but this is the first time anyone has thought about one for the existing coal fleet like this.”
Peabody, the country’s largest coal producer, reported $2 billion in losses in 2015, with only $900 million on hand. The company was forced to declare Chapter 11 bankruptcy in April of last year. Arch Coal found itself in a similar situation in 2016 — it filed for bankruptcy in January.
A 2015 study found the coal industry lost 50,000 jobs from 2008 to 2012 during the early part of the Obama-era. The industry employment in coal mining continued to plummet during former President Barack Obama’s second term, according to federal data, 10,900 of which occurred in the last year alone.
ACCCE and Peabody’s lobbying efforts are separate from an Energy Department request earlier this year for the Federal Energy Regulatory Commission (FERC) to allow power plants to recover the costs of providing baseload power from coal.
Activists believe the proposal is a lifeline for coal and nuclear power plants, but a bane for natural gas producers and green energy firms – they are unable to hold reserve power.
Bailey claims the tax credit is necessary because whatever FERC decides will apply only to about 40,000 megawatts of coal. “This tax idea is designed to help the entire coal fleet, and not conflict with what FERC is doing,” Bailey said.
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