Coal Age

OCT-NOV 2017

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6 October/November 2017 news continued d a t e l i n e w a s h i n g t o n It was the 17 th century English playwright William Congreve who claimed "Hell hath no fury like a wom- an scorned." Congreve never met the renewable fu- els industry. Wind and solar lobbyists reacted furiously to a proposal by Secretary of Energy Rick Perry last month that would allow many utilities to recover the full value of their baseload power units for the reliable power they provide to the grid. The secretary agrees with the National Mining Association (NMA) that today's marketplace ig- nores the advantage coal and nuclear offer by storing their fuel "on-site" — unlike natural gas, wind and solar that rely on vulnerable or spotty transmission infrastructure or sunny and windy days to deliver electricity to your light switch. Given recent weather events that have pummeled the country, and the dramatic collapse of baseload power units in the past decade, Perry thinks it's high time utilities charge for the reliability their units provide. "No way!" sputtered the renewable industry's formidable Washington lobby. By suggesting the Federal Energy Regulatory Corp. (FERC) allow utilities to recover the reliability value of competing baseload plants, the government would be (gasp!) "meddling in the energy market." Worse, this would show raw "favoritism." And the renewable industry will have none of government meddling and favoritism. If there are persuasive, credible criticisms of the secretary's proposal, these aren't among them. And if anyone could make them credible, it isn't the renewable industry. In fact, the government has frequently intervened in the power gener- ation market and has often shown favoritism — no more so than during the President Barack Obama era. Barry's intervention did for coal-based generation what Stalin did for First Amendment rights. He promised pe- nal reform but gave us the gulags. His Environmental Protection Agency (EPA) euthanized older coal plants with muscular regulatory intervention like the Mercury and Air Toxics Standard (MATS). MATS played a big part in forcing the announced retirement of 107,000 megawatts (MW) of power plants in the past seven years. FERC, then chaired by Obama appointees, largely stood by and watched this baseload obliteration. No free-market complaints from the renewable industry either. The Obama administration also showered renewable fuels with pro- duction and investment tax credits that totaled $7.2 billion last year and will come to a tidy $41 billion by 2020. That doesn't count the re- newable fuel mandates in dozens of states that guarantee wind and solar market share. How important have these subsidies been to renewables? How import- ant is water to fish? The Production Tax Credit (PTC) for wind expired five times from 1999 to 2013, and after each of these expirations domestic investment fell between 76% and 92%. Coincidence? In addition to the PTC's $24/MWh gift for the first decade of a pro- ject's life, power purchase agreements can equal that subsidy for 20 years or more, said the Lawrence Berkeley National Laboratory. This gen- erous safety net allows wind producers to offer below-market prices just to ensure they run and collect on the taxpayers' dime. If these energy sources are cheaper than baseload power, why should taxpayers continue to subsidize them? As the wind and solar folks were busily denouncing Perry for subsi- dizing coal, a congressional tax bill proposed curbing renewable fuel tax breaks. The market-distorting "subsidies" for coal quickly became mar- ket-enhancing "incentives" for wind. The industry's lobby, in full-throat- ed opposition to the cuts, pledged it would "fight hard to see that wind energy continues to work for America." Translation: "They'll fight hard to see that American taxpayers continue to work for wind energy." What FERC eventually does by year's end is anyone's guess. It's an independent commission and can require little or nothing from regional transmission authorities. But some market intervention by the commis- sion now might spare it the need for far more intervention later. Luke Popovich is a spokesperson for the National Mining Association, the industry's trade group based in Washington, D.C. Perry's Angry Critics by luke popovich "How important have subsidies been to renewables? How important is water to f ish? "

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