Taxpayers shouldn’t foot the $8 billion bill to bail out a failing energy company
Ohio-based FirstEnergy recently made an audacious plea to the federal government: Bail out more than 80 uneconomic coal and nuclear plants across 13 Midwest and Mid-Atlantic states at a cost of $8 billion a year. If accepted, this would be an unprecedented, illegal government handout that would be paid for by the American people through higher electricity bills.
Let’s be clear: FirstEnergy is asking the Department of Energy (DOE) for a bailout because of business decisions it made over the past decade — not because these dirty coal plants are needed to keep the lights on.
Even PJM, the regional grid operator that manages electricity demand in the states where the bailout would take place, says FirstEnergy’s plants aren’t needed. Yet, the utility wants the federal government to require Americans to pay for them anyway. FirstEnergy’s plea is simple: spend billions on unneeded and expensive power plants, so they can make a profit.
It’s obvious $8 billion is a hefty price to pay to protect outdated, uneconomic coal plants from fair and open competition. These plants are underwater because they’re more expensive than natural gas, wind and solar. And demand growth for electricity is also at a record low, which makes it even harder for uneconomic coal plants to make up the difference in volume.
The list of FirstEnergy’s critics is long and includes manufacturers, electricity generators, natural gas companies, conservative free-marketers, and consumers.
They understand that a guaranteed profit for uneconomic coal and nuclear plants means higher costs for them and everyone else. Higher energy costs would have a ripple effect of pushing up prices for other goods throughout our economy.
FirstEnergy’s plea would also undermine competitive markets and stifle innovation in the energy sector.
A government bailout would reward years of FirstEnergy’s backward thinking and punish other companies that have invested in cleaner, newer and smarter infrastructure, technology and services.
Federal Energy Regulatory Commission, the agency that oversees the U.S. electric grid, already rejected an almost identical appeal earlier this year spearheaded by Energy Secretary Rick PerryJames (Rick) Richard PerryPartisan politics at independent agency draws bipartisan rebuke Overnight Energy: House panel approves park funding, offshore drilling bills | Green group putting M into races | Perry applauds Russia boosting oil production Perry welcomes efforts by Russia, OPEC to boost oil production MORE.
So, why would the Trump administration even consider such an already-dismissed proposal?
Two words: “the swamp.” FirstEnergy’s profit guarantee request would be laughable on its face, were it not for well-placed and well-paid lobbyists.
Over the last week, as the utility presented its plea, the president dined with two FirstEnergy lobbyists. One used to be Perry’s chief of staff, and the other spent time running Trump’s presidential campaign.
Here’s hoping the president and Energy secretary listen to Americans rather than lobbyists. Here’s hoping they adhere to the GOP’s free-market principles and not the swamp culture that President TrumpDonald John TrumpSunday shows preview: Trump sells U.N. reorganizing and Kavanaugh allegations dominate Ex-Trump staffer out at CNN amid “false and defamatory accusations” Democrats opposed to Pelosi lack challenger to topple her MORE promised to eliminate. Here’s hoping that families and businesses aren’t forced to pay billions for outdated, dirty, and expensive power plants.
Corporate cronyism has no place America, especially when it flies so completely in the face of what everyone but coal executives know to be true: better, cleaner and smarter energy choices are available for less, no government bailout required.
Dick Munson is the Midwest Clean Energy director for the Environmental Defense Fund.