Two headlines out of Washington, D.C., during April created more optimism regarding the future of coal-based electricity. The first was the announcement by U.S. Department of Energy Secretary Rick Perry that he was asking for study on the effects of regulations and policies on baseload power sources and grid reliability to be completed by June. The second was the pause announced by the D.C. Court of Appeals regarding litigation over the Obama Administration’s Clean Power Plan.
“Both were good news for the regional lignite industry,” stated Jason Bohrer, president and CEO of the Lignite Energy Council. “The grid study is significant because it’s something that we have been asking for. As more intermittent sources are added to the grid, there are growing concerns about the impact to baseload generation and reliability. The Appeals Court decision is also important because it gives the Trump Administration an opportunity to repeal the Costly Power Plan and have the EPA start over on a rule that is more realistic.”
Secretary Perry announced the study saying, “We are blessed as a nation to have an abundance of domestic energy resources, such as coal, natural gas, nuclear and hydroelectric, all of which provide affordable baseload power and contribute to a stable, reliable and resilient grid. Over the last few years, however, grid experts have expressed concerns about the erosion of critical baseload resources.”
He went on to say that market-distorting regulations and subsidies for renewable sources are decreasing the diversity of the generation mix and “destroying” economic growth.
Following completion of the study, the federal government will use the study to inform policy decisions, Perry added.
“We look forward to the agency’s report and will work with the Department of Energy to address these critical issues that are hurting domestic electricity markets,” Bohrer said.
Lawyers representing the Trump Administration had asked the D.C. Court of Appeals in March to reconsider going forward with the CPP lawsuit that was stayed by the U.S. Supreme Court in February 2016. The lawsuit – in which the Lignite Energy Council and the State of North Dakota were among the parties suing to stop EPA rule – pointed out serious legal problems with the Obama Administration regulatory initiative.
“Pausing the lawsuit is a positive step for American consumers as well as the utility and mining industry,” Bohrer said. “The CPP was a massive regulatory overreach by the EPA, which is why the EPA should start from scratch in developing a rule that has appropriate time lines and goals to reduce CO2 from electric generators. North Dakota’s economy would have been devastated if the Clean Power Plan had advanced to fruition.”