FirstEnergy Asks Administration For Help To Get Customers To Pay More
NOEL KING, HOST:
An Ohio power company that recently filed for bankruptcy protection may be the latest sign of how coal and nuclear plants are struggling. FirstEnergy is also making an unusual request for help, and the company appears to have the president's ear. Here's President Trump on a recent visit to West Virginia.
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PRESIDENT DONALD TRUMP: The miners are happy. And we'll be looking at that 202. You know what a 202 is, right? We'll be looking at that. We're trying.
KING: And if you don't know what a 202 is, Reid Frazier of StateImpact and the Allegheny Front explains.
REID FRAZIER: The night before Trump said that, he reportedly attended a fundraiser with a FirstEnergy lobbyist. The company would not confirm that, but we know their coal and nuclear plants in Ohio and Pennsylvania are struggling to compete against cheap natural gas. So now FirstEnergy has asked the Department of Energy to declare that 202 - actually, technically, it's a 202(c). Ari Peskoe of Harvard University says it's an emergency measure.
ARI PESKOE: This provision of the law was specifically written by Congress in 1935 to assure that electricity supply did not have the sort of problems that arose during World War I.
FRAZIER: The law has also been used for things like hurricanes or a lightning strike that knocked out a power plant. But FirstEnergy wants Energy Secretary Rick Perry to use his sweeping powers to make customers pay more for electricity from nuclear and coal. So what's the emergency? FirstEnergy declined interview requests but has said without help, these plants will close, and blackouts will come to the electric grid serving the Mid-Atlantic. The head of that grid, the PJM Interconnection, is worried long term about plant closures. But CEO Andy Ott says because of new natural gas plants, there's really no danger of power outages.
ANDY OTT: We have an oversupply situation. We have more power-generation capability than we need - in fact, 10 percent more.
FRAZIER: Many call the emergency request a long shot. Environmental groups, oil and gas companies, and rival utilities all oppose it.
SAM WALSH: This request is kind of like a half-court shot at the buzzer, right?
FRAZIER: Sam Walsh worked in the Department of Energy in the Obama Administration. First, he says FirstEnergy's request would shake up the competitive energy market. He also thinks the company's situation is a bad fit for Section 202(c). It's asking for four years of economic aid, using a law designed for temporary fixes to the grid.
WALSH: I think that they're really, really stretching it. You know, that is a very, very broad action that they're asking DOE to take.
FRAZIER: But this idea of subsidizing coal and nuclear plants keeps coming up. Last year, another company, Murray Energy, asked Energy Secretary Perry to invoke the 202(c). The company is FirstEnergy's biggest coal supplier, and its owner, Bob Murray, is a big Trump backer. Perry did not do it then, but last year, he came up with his own subsidy plan, which federal regulators shot down. Perry has said the emergency measure 202(c) might not be the most efficient way to help coal and nuclear plants. But he clearly wants to help them. The only question is how. For NPR News, I'm Reid Frazier in Pittsburgh.
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