Trump’s Chief Energy Regulator Floats The Idea Of ‘Casting A Lifeline’ To Coal

Chris White | Energy Reporter

The country’s top energy regulator said Wednesday night that the agency could prop up the coal industry to help stabilize the energy grid for the short-term.

Giving a helping hand to coal and nuclear power would not toss energy markets into complete chaos, Neil Chatterjee, chairman of the Federal Energy Regulatory Commission (FERC), told executives at an Axios luncheon. The energy grid could be left in the lurch in the future if coal wilts today, he said

“That’s an outcome that concerns me,” Chatterjee, a President Donald Trump nominee and former policy adviser for Kentucky GOP Sen. Mitch McConnell, said about the short-term market pressures of shutting down coal and nuclear power could bring. “I want to have no regrets at the end of this process.”

He called it important to “cast a lifeline” to the coal industry while FERC completes a long-term analysis on the country’s energy grid. “I truly think there is a way to achieve that in a legally defensible manner that does not distort markets,” he said.

Chatterjee’s comments come as FERC is considering whether to take up a request from Energy Department chief Rick Perry to allow coal and nuclear plants operating in competitive markets to recover costs if they have 90 days-worth of fuel on site. Neither green energy providers nor natural gas producers can hold in inventory their energy output for that length of time.

The requests come as coal has continued to slide in relevance in the energy markets. Sixty gigawatts of coal-fired power have come offline since 2010, according to industry data. Most energy experts blame low natural gas prices, however, environmental regulations and subsidies for green energy play a crucial role in closures.

Wholesale electricity prices vary from day-to-day and reflect a power plant’s marginal cost of generating energy. That means wind and solar power have a distinct advantage over fossil fuels, since it costs virtually nothing to produce an extra unit of power.

Perry’s idea came shortly after an Energy Department report from earlier this summer showed that natural gas and regulations were walloping coal. The request has received waves of opposition from former FERC members.

Four former chairmen — Betsy Moler, James Hoecker, Pat Wood III, and Joe Kelliher — and one former commissioner, Nora Mead Brownell, for instance, came out in October in opposition to Perry’s request. They all currently have ties or are lobbying on behalf of green energy firms that could be affected if the rule is implemented.

The bipartisan group filed comments shortly before the Oct. 26 deadline, arguing that “the Commission’s adoption of the published proposal would instead disrupt decades of substantial investment made in the modern electric power system, raise costs for customers, and do so in a manner directly counter to the Commission’s long experience.”

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