An independent energy agency on Monday rejected a Trump administration plan to bolster coal-fired and nuclear power plants, dealing a blow to President Donald Trump’s efforts to boost the struggling coal industry.
The decision by the Republican-controlled Federal Energy Regulatory Commission (FERC) was unexpected and comes amid repeated promises by President Trump to revive coal as the nation’s top power source. The industry has been besieged by multiple bankruptcies and a steady loss of market share as natural gas and renewable energy flourish.
The energy commission said in its decision that despite claims by the administration to the contrary, there is no evidence that any past or planned retirements of coal-fired power plants pose a threat to reliability of the nation’s electric grid.
The administration’s plan was opposed by an unusual coalition of business and environmental groups that frequently disagree with each other. Critics said the plan would distort energy markets and raise prices for customers, especially in the Northeast and Midwest.
Energy Secretary Rick Perry thanked the panel Monday for addressing his proposal, which he said had initiated a national debate on the resiliency of the nation’s electric system.
“What is not debatable is that a diverse fuel supply, especially with on-site fuel capability, plays an essential role in providing Americans with reliable, resilient and affordable electricity, particularly in times of weather-related stress like we are seeing now,” Perry said.
Perry was referring to his plan, which FERC rejected, to compensate power plant owners that maintain a 90-day fuel supply protected against severe weather and other disruptions, a feature shared by coal and nuclear power but less apparent with renewable energy sources such as wind and solar power.
The exact cost of Perry’s plan is unknown, but critics said it could have resulted in subsidies to coal and nuclear plants worth billions of dollars.
Environmental groups said the administration’s plan would boost dirty and dangerous fuels, while energy providers outside of coal and nuclear warned about interference in the free market. Manufacturers that use huge amounts of electricity complained about higher energy prices that could be passed on to consumers.
Tech giant Apple (AAPL) weighed in Monday against the proposal, saying it would inhibit innovation and competition, and interfere with plans to increase use of “clean energy” such as wind and solar power.
In its decision, FERC’s GOP-controlled five-member energy panel essentially agreed with critics who said no evidence supported a threat to the grid’s day-to-day reliability that would justify the emergency action Perry was seeking.
An Energy Department report last year called reliability “adequate,” citing significant additions to the grid from natural gas, wind, and solar.
FERC said in its decision that it’s launching a new process to evaluate the resilience of the nation’s electric grid, which is overseen by a network of regional transmission organizations and independent system operators.