A new coal subsidy carries a high price

In its determination to do whatever it takes to “save coal,” the Trump administration has never let public health or the climate stand in the way. Now it wants to go one better.

To stop the recent spate of coal-fired electricity plant closures, Energy Secretary Rick Perry wants power markets to reward them for their “resilience” in the event of big storms or other natural disasters — in effect, paying them enough to keep all coal plants open for the foreseeable future.

The market already pays for this added reliability — through higher prices when supply tightens during bad weather. Perry says power providers need plants that can keep 90 days’ worth of fuel on hand, as only coal- and nuclear-powered plants can. There’s no such need, because the market already assures an adequate fuel supply.

What Perry is proposing amounts to re-regulation of wholesale power markets — a giant step backward. Since they were deregulated in the 1990s, these markets have grown more efficient. As the price of natural gas has fallen, its use has increased, and many coal plants have been converted to natural gas or shut down.

The Federal Energy Regulatory Commission will say whether the new plan goes ahead and, if so, exactly how it would work. The fact is that coal faces a dim future either way, unless the Trump administration discourages use of natural gas, a cheaper and cleaner fuel.

Perry argues that other energy sources benefit from subsidies. True. It would be better to phase them out and use a carbon tax to support clean energy. When FERC rules on the plan next month, it should turn it down flat.

This story was originally published October 24, 2017 at 5:25 PM with the headline "A new coal subsidy carries a high price."