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Coal power coalition: Trump's executive orders 'good first step'

Though opponents of coal balked at President Donald Trump's executive actions aimed at boosting the sector, the industry is likely to ask for more from its new friends in Washington.

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Paul Bailey, president and CEO, American Coalition for Clean Coal Electricity

Trump's executive order calls on the U.S. EPA to reverse the Clean Power Plan, lift restrictions on new fossil fuel power plants and ends a moratorium on federal coal leasing. Paul Bailey, president and CEO of the American Coalition for Clean Coal Electricity, said coal-burning utilities appreciate the "good first step" taken toward rolling back the Clean Power Plan and regulations that essentially required new coal power plants to be installed with carbon capture technology. However, Bailey said, there are other EPA policies still threatening coal plants.

"We're focused on preventing more coal retirements," Bailey said. "What we would like for the administration to do is to ask utilities to pause their planning for these coal retirements. Pause in the sense of 'put your pencils down in planning these retirements' and wait and see what we do to fix these policies."

Lately, many of those pencils have been used to write coal out of the energy mix. Even since Trump took office, utilities have continued to retire coal capacity, and those pulling the largest plants offline have indicated that Trump's orders will not affect their planning.

As recently as March 20, Dayton Power and Light Co. said it would retire its 2,308-MW J.M. Stuart and 600-MW Killen Station coal plants in Ohio. A spokesperson cited market conditions that left the plants "not economically viable beyond mid-2018."

Bailey said the coal power trade association is focusing on its next priority, the EPA's Coal Combustion Residual Rule and Effluent Guidelines. Both rules, finalized in 2015, deal with how the industry may dispose of coal wastes. They have also been cited by utilities as contributors to closure and retirement announcements.

By "at least delaying the deadlines" — set for November 2018 — Bailey hopes further coal retirements could be curtailed with help from the administration. By the ACCCE's count, Bailey said, about 51 GW of the last 59 GW of coal capacity retirement can be chalked up to EPA regulations.

Many of those retirements were over mercury emissions standards. Bailey said that while many in coal are still upset over those rules, "as an organization, we've moved on." That likely means the coal sector's efforts will be more about preventing further losses rather than bringing generation back online or increasing coal capacity.

"What we're focused on right now is preserving what's left of the coal fleet," Bailey said, noting that much of the existing fleet could boost generation with capacity that is not being utilized. Currently, he said, the organization estimates that another 52 coal units could retire because of EPA policy.

The organization also plans to revisit the recently revised Regional Haze Rule. The rule, which requires states to form a plan for reducing visibility-limiting pollutants like nitrogen oxide, was cited as one of the reasons for retiring Salt River Project's Navajo power plant. Trump's EPA administrator, Scott Pruitt, sued the EPA in 2012 challenging the rule.

Trump, who has already signed a bill that would repeal the Stream Protection Rule, may also try to give coal more of a boost on the mining side as well. Murray Energy Corp. CEO Robert Murray, a Trump supporter, attended the signing of the Stream Protection Rule repeal and the executive order issued March 28. In a November 2016 interview with S&P Global Market Intelligence, the coal executive said he hopes Trump will cut government agencies like the EPA and the U.S. Mine Safety and Health Administration in half while also dramatically reducing staff at the U.S. Department of Justice.

Murray said coal production "will never come back to where it was" and predicted that U.S. coal production would stabilize around 650 million to 700 million tons per year. He also projected production would have fallen to about 540 million tons if the Clean Power Plan had been implemented. An S&P Global Market Intelligence analysis shows coal production was about 728.4 million tons in 2016.

Bailey hopes that utilities will be able to again think about building new coal-fired plants that are relatively high efficiency and low emissions. That could be done, he said, if companies are not required to use carbon capture and storage technology. Efforts to scale the technology, like Southern Co.'s Kemper project, have proven to be expensive and complicated.

"One of our largest members said: 'We want to keep coal in the mix.' That's not for philosophical reasons or ideological reasons," Bailey said. "That's because they think they really need a coal fleet to provide reliable baseload electricity."

One issue, recently pointed out in an interview by Bruce Nilles, senior director of the Sierra Club's Beyond Coal campaign, is that uncertainty about what standards and policies will be in the future is leading many companies to remain hesitant about investment in coal. In lieu of risking a change in administration, Nilles said, many power producers looking toward the long term are finding "the only smart investment in a world of uncertainty is a zero-carbon alternative clean energy."

"I thought, just like other people, that Mrs. Clinton was going to be elected," Bailey said, noting that utilities are definitely looking far down the road when making investments. "I started planning based on that and look what happened. So, I don't know what I would tell utilities right now. I'd say we might have President Trump for four years, we might have President Trump for eight years, we might have some other Republican after that. You just never know."