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Washington Examiner (Opinion): Electricity Customers Want Competition

The Washington Examiner published this opinion piece from a group of authors representing the perspective of electricity buyers large and small, including the Advanced Energy Buyers Group that AEE coordinates. Excerpts below:

President Trump recently announced that the Energy Department is reconsidering funneling emergency aid to unprofitable power plants in response to a request from a bankrupt company. But experts agree that no grid emergency exists, and that such action would cost consumers billions and destroy market competition.

Indeed, subsidizing troubled companies would constitute an extreme measure at consumers’ expense. It’s about time consumer voices took control of the grid narrative.

The leader of the bailout push is FirstEnergy Solutions, a company that recently declared bankruptcy because some of its coal and nuclear plants are not competitive in today’s market. The company asked Energy Secretary Rick Perry to declare a grid emergency under Section 202 of the Federal Power Act to keep plants online to “ serve the public interest.”

Yet such action would be a clear abuse of statutory authority. The Energy Department’s own technical report in 2017 found that the bulk power system is performing reliably. Clearly, “serving the public interest” actually means letting markets run their course.

If the plants were necessary for grid reliability and resilience, then customers would share FirstEnergy’s concern. Instead, electricity users are deeply distressed by the immediate costs they could face, as well as the long-term damage to the market, due to the proposed intervention...

...This is not an issue of coal and nuclear versus renewables and natural gas; this is about customers versus rent-seekers, good versus bad governance, and markets versus destructive government intervention.

The grid is in transition, not crisis. In fact, it is undergoing a healthy and beneficial transformation. The crisis could occur if we let government, instead of markets, determine investment decisions.

Any emergency that may exist is limited to the financial condition of companies that bet against market forces. Such companies do not deserve bailouts. Instead, they should face their creditors and reposition themselves for the energy system and economy of the future.

America’s families and businesses deserve a government that upholds fair competition. Everybody should play by the same rules. As electricity consumers and experts, we urge the Trump administration and Energy Department to champion competition and good governance by rejecting baseless calls to bailout unprofitable power plants.

Devin Hartman is electricity policy manager at the R Street Institute. John Hughes is president & CEO of the Electricity Consumers Resource Council. Owen Kean is senior director of energy policy at the American Chemistry Council. Caitlin Marquis is manager of policy at the Advanced Energy Buyers Group.

See the complete opinion piece here with all reference links in story.

Topics: AEE In The News