FERC Nixes Plan to Subsidize Coal, Nuclear

The Federal Energy Regulatory Commission has rejected a proposal by the United States Department of Energy to provide subsidies to coal and nuclear power plants.

The proposal came out of a concern that the electrical grid had become unreliable, leaving the country vulnerable to possible shortages of electricity.  The Department of Energy believed (1) that power plants with large amounts of fuel on-site are necessary to grid reliability; and (2) that those plants are unfairly being driven out of business by subsidies to renewable energy.

To address this difficulty, the Department of Energy commissioned a study of grid reliability.  The study found that (1) the loss of coal and nuclear plants has not diminished reliability, and (2) it is cheap natural gas, not renewable energy subsidies, that has driven coal and nuclear out of business.

In spite of what its study said, the Department of Energy proposed that the government subsidize utilities which stored a ninety day supply of fuel on site.  In practice, this meant coal and nuclear power.  Wind and solar energy do not store fuel.  Natural gas is delivered as needed instead of being stored on site.  The only power kind of power plants that store fuel on site are coal and nuclear.

Now the Federal Energy Regulatory Commission has rejected this proposal.  It determined that there was no evidence that retiring coal and nuclear plants threatened the reliability of the electricity grid.