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Perry a 'fan of states making their own decisions'

US needs to have redundant, diverse energy, resilient delivery

US Secretary of Energy Rick Perry told reporters the Department of Energy is not developing any policy incentives to keep struggling coal-fired and nuclear power plants operating, insisting that doing so is the Federal Energy Regulatory Commission's job.

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The comments came after a speech this week at the Edison Electric Institute's annual convention in which he warned that regulation and clean power advocates are grave threats to the US economy, largely repeating the speech he offers at most public appearances, although perhaps more forcefully than usual.

"I don't think the DOE has any regulatory or statutory authority" to provide subsidies for coal and nuclear power, Perry said.

Perry added efforts to formulate subsidies do not appear to have made any headway in the past year or so. In January 2018, FERC rejected a proposed rule DOE developed that would have ensured full cost recovery for plants that stored at least 90 days of fuel onsite -- criteria that essentially only nuclear and some coal plants could have met.

"I haven't seen any movement out of FERC or the White House ... and I have nothing to add," Perry said. However, he did say coal exports were up and that plenty of other efforts are ongoing to support coal.

When asked if he thinks other states should follow Ohio's lead and try to provide subsidies to struggling coal and nuclear power plants, Perry said: "I'm a pretty big fan of states making their own decisions."

During his earlier speech, however, Perry blasted state governments and officials for blocking energy infrastructure projects.

Perry took particular aim at New York for thwarting the development of a pipeline to deliver natural gas to New England. He also assailed Washington Governor Jay Inslee, calling him a "global activist" for signing a bill banning hydraulic fracking for oil and natural gas in the state and supporting the exclusive use of zero emissions and renewable energy.

"If this philosophy prevails, everyone in this room knows full well what the consequences will be," Perry warned. "It will impact our entire way of life."

The energy secretary noted that 43% of the power generated in the US is produced by nuclear and coal-fired generating plants. And when a crisis strikes the grid, he said, those two fuels are the most reliable available.

But "thanks to blatantly discriminatory rules and regulations, nuclear and coal plants are being retired at an alarming rate," Perry said.

Equally alarming, according to Perry, is the existence of forces that want to ban both of those fuels.

'WHEN THE SUN DON'T SHINE AND THE WIND DON'T BLOW'

"If they succeed in their quest, if they take us from 'all-of-the-above' to 'none-of-the-above with the exception of renewables,' they will ruin our ability to run our economy when the sun don't shine and the wind don't blow," Perry said.

Perry also discussed how US innovations such as fracking have helped both the country become energy independent and other nations import American gas.

"We're weaning them from dependence on unfriendly sources of energy and empowering them with genuine energy choice," he said. "We're doing it all because we have put innovation before regulation. ... We sent a clear message that we're not going to regulate you to death."

Asked what keeps him up at night, Perry said it is the fear that those who wish to do harm will see a major weather event as a signal to launch a cyberattack using already embedded destructive malware followed by a physical attack on a major gas pipeline.

"That scenario ... is a terrifying thought to me," Perry said.

Thus, he added, the US needs to have redundant and diverse energy supplies and resilient delivery systems.

-- Glen Boshart, S&P Global Market Intelligence, newsdesk@spglobal.com

-- Edited by Keiron Greenhalgh, newsdesk@spglobal.com

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