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The coal industry is stepping up this summer its campaign to clear the "bailout" label that has become synonymous with the Trump administration's desire to save economically weak coal plants, while reinforcing the maintenance of coal in the national energy mix.
"We're just trying to fix the record," said Michelle Bloodworth, the new president and CEO of the Coalition for Clean Coal Energy, a pro-coal industry group.
The Bloodworth Group is stepping up its efforts this summer to reverse the characterizations that accounting for the value of the coal fleet would constitute a government-backed subsidy or bailout for the coal industry.
A coalition of business organizations representing all sectors, from oil and natural gas to solar panel manufacturers, opposes the idea of using market-based incentives or emergency powers rarely invoked to prevent the closure of coal plants over the next three years.
"We simply do not see any reason to have any federal intervention on the market to bail out coal and nuclear power," said Dena Wiggins, president of the Natural Gas Supply Association, representing major groups integrated and independent natural gas producers, and a member of the broad coalition opposed to coal. She added, "We simply do not believe that there is an emergency or national security problem that requires federal intervention."
Recently, a group of market and conservative groups called the president to give up the "bailout" scheme, and let the market dictate the composition of energy resources.
"We try to say, we do not think it's" a bailout, "said Bloodworth." We think it's more about "valuing," and this can be done in a market approach "that rewards the" attributes "of coal-fired power plants that help the grid and consumers.
Electricity markets are currently favoring natural gas plants over coal and nuclear because of their low cost due to the boom in shale energy.This is one of the reasons why coal and nuclear power plants are forced to retire or close prematurely over the next three to five years.
Opponents of the Trump Coal Plan will issue a separate study on the costs of a coal and nuclear bailout on consumers, say sources close to the company.
"Retail customers pay will probably have more electricity to cover the costs of the subsidy, "said giant Moody's credit ratings in an badysis released last month. It would also require grid operators to use less efficient natural gas power plants, based on the badysis.
But the coal group says natural gas plants can not withstand a major blackout like coal without tens of billions of dollars in investment, arguing that natural gas would be more expensive without coal.
The group argues that coal plants are allowed to stay in the mix, or taxpayers will be forced to pay more to make the necessary investments to secure natural gas power plants if the grid is subject to severe weather constraints or even cybernetic. attack.
One of the main attributes of coal is what Bloodworth's group and network regulators call "fuel safety," which coal and nuclear power supply to the American power grid
. continue to produce electricity in the event of a disturbance. Energy Secretary Rick Perry has defined this period as 90 days in his first proposal last year to provide market-based incentives for coal-fired power plants and nuclear power plants. Upgrading the natural gas fleet to ensure fuel safety would cost between $ 50 and $ 80 billion in the PJM market, the largest electricity market in 13 US states overseen by the federal government.
"A significant amount of infrastructure is needed to make the gas more resilient," noted Mr. Bloodworth in an email. "On the other hand, the transport infrastructure for the coal fleet is already in place and has considerable redundancy."
She cited a report from the ICF commissioned by the Interstate Natural Gas Association of America, representing natural gas companies. his point. The report showed that there would be nearly $ 400 billion of investment in intermediate natural gas infrastructure between 2018 and 2035.
His group plans to issue briefs in the coming weeks to support the maintenance of coal in the energy mix, while meeting network operators.
The National Mining Association is also seeking support to keep the nation's coal fleet functioning, accusing markets of favoring one form of energy over another.
"We are moving towards a point of no return from the crisis of reliability and resilience," said a mining trade group official.
Closure of 12,000 megawatts of coal power is expected by the end of the year. "It's enough capacity to power 8 million homes," said the manager.
"We need decisive action to preserve the reliable and affordable energy that continues to escape each and every day."
The mining group "strives to raise awareness of the need for more energetic measures" to solve the problems of the energy markets. push power plants that provide electricity 24 hours a day, seven days a week "in favor of less reliable alternatives," said the manager.
Perry initially asked the Federal Energy Regulatory Commission to reward coal-fired power plants and nuclear power plants for the "resilience" that they bring to the grid through their 90-day fuel supply. But FERC unanimously rejected the proposal, citing a lack of data to support the need to provide market-based incentives to factories.
Instead, FERC has opened its own process to ensure that all segments of the industry define resilience and then determine what they should do to solve them in major markets of energy. oversee. This could take years to solve, say industry sources.
But Trump wants something to happen sooner because of the national security implications of not having enough coal power plants to provide electricity.
During a speech in West Virginia last week, Trump explained to supporters why he favored coal rather than natural gas.
"You know, you're bombing a pipeline, that's the end of the pipeline," Trump said. Trump ordered Perry last month to put together a plan to save troubled power plants that are forced to close prematurely because of low natural gas prices and other market-related issues.
Perry has struggled for months to find a way to deal with the premature closures of coal and nuclear power plants, which has been tricky both from a legal and other point of view. regulatory.
Paul Bailey, the former CEO of the Coalition for Clean Coal Electricity, describes two processes that occur simultaneously in the government to solve the problems of power plants.
First, the President and Perry are trying to fix the problem, but the process is not yet clear.
The other process is much more deliberate and conducted by the FERC.
Bailey, who currently directs the Coal Group's policy, says his group is supportive of the FERC process, and sees a way to keep coal in the mix with a variety of short-term actions. There is strong opposition to helping coal-fired power plants on both these levels, which is why Bailey believes that further badysis is needed to justify their position.
A recent report done for the coal group revealed that there would be reliability issues. to close, especially in the FERC-overseen region controlled by the PJM network operator. Natural gas produces much of the electricity in PJM, and Bailey argues that natural gas will not suffice if there is a disturbance.
"If there are gas outages, the PJM network becomes less resilient. "So, we keep saying, why are not others doing it?" Bailey presented the report's findings to PJM earlier this month.
He is also working on what he hopes "to be a simple explanation of the types of badysis we would like to see all network operators do" when it comes to evaluating the effects of coal plant closures.
"We just did not find the time to finish that," Bailey said. But once the new badysis is completed, his group will take him to the North American Electric Reliability Corporation, the nation's reliability monitoring agency, and to the FERC.
The second part of their efforts relates to the fact that Congress adopts short-term tax incentives that would cover a portion of the operating costs of power plants, while FERC completes its work more focused on resilience .
Legislation was introduced in the Senate and House to provide temporary incentives for coal-fired power plants.
It would act of a "temporary tax credit" for a period of five years, which "corresponds to the period of three to five years that we believe necessary to the FERC to finish, "said Mr. Bailey.
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