The nation’s biggest electric grid operator said a Trump administration plan to change the way electricity is priced to reward coal and nuclear power is unworkable and potentially against the law.
Harrisburg, Pennsylvania-based PJM Interconnection, which operates the grid covering 65 million people from Illinois to Washington, D.C., submitted formal comments on the plan late Monday to the Federal Energy Regulatory Commission.
In a conference call with reporters and industry analysts, PJM President CEO Andy Ott said the plan by Energy Secretary Rick Perry is unworkable.
“In fact, we do believe it’s contrary to law and, again, will not really solve any problems,” Ott said.
PJM, which administers the transmission grid and the marketplace that brings electricity from power plants to customers, said the plan would undermine the reliability of markets, intrude on state policies, violate the Federal Power Act and represent a radical departure from the commission’s policies.
Guaranteeing higher payments to coal, nuclear and other qualifying power plants would probably increase consumers’ electric bills, unless FERC found another source of money, Ott said.
Coal-fired and nuclear generators comprise just over half of all generation capacity in PJM’s region. However, the amount of U.S. electricity generated by coal has fallen to about one-third in the last decade, mostly as hydraulic fracturing has made natural gas cheaper and more plentiful.
The natural gas boom also has hit nuclear power plants, sending their owners in search of a financial rescue in states including Pennsylvania and Ohio where competitive electricity markets have compounded the effect.
In its 76-page filing with FERC, PJM urged the commission to reject the plan drawn up by President Donald Trump’s administration.
It “misidentifies a problem, misstates the cause, and then proposes a radical solution that is antithetical to clear Congressional and Commission policy in favor of promoting competitive energy markets,” PJM wrote.
Perry’s plan would reward nuclear and coal-fired power plants for adding reliability to the nation’s power grid. The plan is needed to help prevent widespread outages such as those caused by Hurricanes Harvey, Irma and Maria, Perry claims.
But PJM said power line damage — not a lack of fuel on hand at power plants —causes outages during hurricanes.
The Trump administration’s strategy wouldn’t lead to the outcome it envisions and “appears aimed less at truly addressing resilience concerns and more at benefiting certain preferred generators and fuels and the industries they support,” PJM wrote.
FERC is considering the plan and could decide by mid-December. It is not required to follow Perry’s recommendation, though two of the three current commissioners were nominated by Trump, a Republican.
Advocates for natural gas and renewable energy sources have criticized Perry’s proposal, while it has been embraced by coal and nuclear power groups.