A U.S. Energy Department plan that would force power companies to buy electricity from coal-fired and nuclear-power plants at higher than market prices is projected cost some $34 billion in its first two years – a bill that will be passed on to consumers. Your light, power and heating costs will climb if the plan goes through.
The Federal Energy Regulatory Commission, which oversees electricity rates, shot down the plan in January. The commission found that the costs outweighed the benefits and that the Energy Department did not provide enough evidence to justify massive subsidies to power plants that can’t compete with cheaper, natural gas-fired electric utilities.
The White House then decided to appoint commissioners who support its subsidy plans. President Trump nominated Bernard L. McNamee to fill an open seat on the commission. Since McNamee was recently executive director of the Office of Policy and deputy general counsel for energy policy at the Energy Department, he was involved in drafting the plan and is expected to support it as a commissioner. His public statements support that view. Mr. McNamee was confirmed by the Senate earlier this month. It’s troubling to see McNamee embrace such anti-competitive positions, considering his past association with respected conservative organizations.
Besides higher electricity costs, there are other strong reasons to oppose the plan. It subsidizes coal and nuclear plants – something Republicans were against when President Obama decided to fund alternative-energy producer Solyndra with more than $500 million. The new Energy Department plan would cost almost 70 times more than Solyndra.
The Energy Department says it needs the subsidies to deter cyberattacks. The idea here is that nuclear and coal-fired plants maintain a 90-day supply of fuel at their power plants, so the hackers could not stop them from generating electricity.
This is true, as far as it goes. But, how do these plants transmit power to the rest of us? Through a power network known as the grid. And guess what? It is also vulnerable to attacks.
Natural gas plants are no more at risk to cyberattacks or storms than coal or nuclear ones. What’s more, the natural gas industry is already working diligently both individually and with the government to protect its critical assets from cyber threats, in addition to terrorists and natural disasters.
The government is also working to harden natural gas and electrical networks. New training, technology and redundancies make the pipelines and the grid harder to hit every day.
The Department of Homeland Security recently created a center to pool expertise from the public and private sectors.
Americans want affordable electricity and the new jobs that cheaper power brings. And free-market competition is the best way to discipline companies, not subsidies to insulate them from innovation.
Meanwhile, the Transportation Security Administration released new, tougher rules for pipelines to safeguard them from attacks. So the problem is being solved, without the need for costly subsidies.
On the campaign trail, President Trump championed free markets. He was right that open competition produces new ideas and lower prices over time. Its time he returned to his roots and for the Energy Department to follow.
Minority and single-parent households would be among the hardest hit by energy price increases sparked by the subsidies proposed Energy Department.
These households have the smallest amounts of disposable income, on average, and are disproportionately affected by higher energy prices. We tend to live in older, less energy-efficient homes that are already costlier to heat and cool than newer, higher-priced houses.
Finally, members of minority and single-parent households often hold jobs that are more sensitive to the price of energy, such as manufacturing, railroads and small businesses.
This is why the Congress of Racial Equality (CORE) formed and led a coalition of black and Latino ministers, senior citizen advocates and the National Black Chamber of Commerce called the Affordable Power Alliance (APA) in 2008. APA fought against government regulation and policies that resulted in increased energy costs for vulnerable consumers.
APA vehemently opposed the Obama administration's “war on coal,” but is equally concerned about anti free-market subsides proposed by the Trump administration. APA continues to believe that the best energy policy is a policy that allows for free-market Darwinism. Jump ball and let the best energy source win out, subsidy-free.