Trump's Crony Capitalism: Energy Division

Trump orders "immediate steps" to save money-losing coal and nuclear power plants.

DOE

Who you gonna call when your business is being outcompeted and you're going bust? The feds, of course. President Donald Trump obliged his cronies in the electric power and coal industries today by ordering the Department of Energy (DOE) to take "immediate steps" to save the companies from going bankrupt. Those immediate steps will result in consumers having to pay higher power bills.

Back in March, the bankrupt nuclear and coal-fired electric power generator FirstEnergy asked the DOE to invoke section 202(c) of the Federal Power Act and declare that an "emergency condition" exists in Midwestern electricity markets. The company claims that closing down its old and unprofitable coal-fired plants will significantly reduce the reliability to electricity supply in the region.

In fact, the only real "emergency" is that the company has been losing money. In the guise of maintaining electric power reliability, FirstEnergy wants the DOE to order all coal and nuclear generating units in the PJM Interconnection footprint—a region covering all or parts of 13 states, plus D.C.—that have at least 25 days of onsite fuel be given non-market, cost-of-service rates and also guaranteed profits for at least four years. The "onsite fuel" qualification is meant to exclude generators that burn natural gas to produce electricity. Basically, the company wants the federal government to force consumers to buy its expensive electricity, and it wants to be guaranteed a profit too. Subsidizing these coal-fired plants would also help keep Trump's coal industry pal Robert Murray, CEO of the Murray Energy Corporation, in business.

In January, the Federal Energy Regulatory Commission voted unanimously to reject an earlier DOE proposal requiring coal-fired and nuclear power plants to stockpile 90 days of fuel onsite. The requirement was artfully framed as a measure to increase power grid resilience, but it was really a stealth subsidy to the coal industry.

Coal and nuclear power plants are losing money largely because they are being outcompeted by new and cheaper generation fueled by natural gas.

The folks who run the power grid at PJM Interconection don't think there's a looming supply reliability problem. "There is no need for drastic action," says a statement PJM released today. It adds:

Markets have helped to establish a reliable grid with historically low prices. Any federal intervention in the market to order customers to buy electricity from specific power plants would be damaging to the markets and therefore costly to consumers….

The PJM electrical grid is more reliable than ever, with 23 percent reserve margins and billions of dollars of new investment. All of this is occurring while emissions are decreasing and wholesale prices are at historic lows for the 65 million consumers we serve. From 2008 to 2017, wholesale prices in PJM fell by more than 40 percent. Competition has required generators to operate more efficiently while also attracting new, more efficient technology, resulting in more than $1.4 billion in annual savings.

Just another depressing example of Trump invoking war emergency powers to reward corporate cronies and stick it to consumers.

Comments

[John]

Meanwhile reason doesn’t write a single word about the jobs report today. I guess the news is just too much for the staff to take.

[Calidissident]

If the US falls into a recession while Trump is in office, are you going to continue arguing that the president is responsible for every bit of economic news?

[John]

Of it doesn’t are you going to consider the possibility you might be wrong?

[Tony]

I’m one Republican recession away from not having a job probably, so I hope that despite his best efforts that things stay afloat. But they probably won’t.

It’s an easy question for you though. You’ve deployed far more acrobatic hypocrisy than will be required for this simple “blame Obama” exercise.

[Last of the Shitlords]

Tony, garbage like you shouldn’t have a job. When you have a job it takes one away from a real human.

[Tony]

For the last of your species you sure are bossy to the rest of us.

[iffickck]

Hey look it’s butch Tony sneaking in and corpsefucking a thread where he makes a fool of himself again.

[Calidissident]

Wrong about what? There’s going to be a recession at some point in the next few years regardless of who is president. Could be before or after Trump leaves, but we are already in one of the longest expansions ever so it’s very likely to come relatively soon. And when it does, and if Trump is still in office or just left office, I’m not going to argue it’s all his fault any more than I’m going to credit him for all economic good news today (especially for trends like falling unemployment that started long before he took office).

[John]

Sure. So you don’t think economic policy has anything to do with it? I think it does. And reason has spent the last three years now crying wolf about how Trump is going to destroy the economy. How much counter evidence do we need before they and presumably you who agreed with them admit you were wrong and maybe question some of your assumptions and beliefs? Or are you brain dead like Tony and no amount of evidence would cause you to do that?

[John]

So you diagree with Reason that Trumo is going to destroy the economy?

[Calidissident]

I don’t think Trump is going to destroy the economy. I’m also not sure where Reason has said he will destroy the economy. Our system doesn’t really enable the president to do that, possibly excepting something like starting a disastrous war (and that’s by convention rather than design).

I think he’s done some good and some bad things for the economy but overall we’re talking marginal effects. The economy was growing before Trump and while the growth last year was higher than 2016 it was perfectly normal compared to the average growth since the end of the recession (and like the Obama years, still below average compared to previous expansions). Unemployment was already low and had fallen for years prior to Trump taking office.

I just find this entertaining because I know that you’re going to back off the notion that the president is primarily responsible for the state of the economy if there’s a recession during his time in office.

[John]

Read the things Suderman said during the election or any of their articles of tariffs. They have been histrionic to put it mildly

[Calidissident]

If you have a particular Suderman piece to link I’ll read it, I don’t exactly have his take from two years ago on Trump’s exact impact on the economy memorized.

They’ve written a bunch of articles about tariffs, perhaps too many, I can’t recall any of them saying they’re going to totally wreck the economy. There’s a difference between saying something will have a negative effect and saying it will destroy the economy. There are also many things affecting an economy besides tariffs, and most of the tariffs didn’t even go into effect until today.

[hello.]

we are already in one of the longest expansions ever

Lol. Not even true by the cooked government stats where the 1% growth rate was fueled entirely by the GDP contribution of federal spending and the rest of the economy has been in continual contraction since 2008.

[Elston G]

Meanwhile no comment from you on the article in question. Do you support the crony capitalism that Trump is trying to engage in? Are you really a corporate socialist? The readers want to know.

[Rev. Arthur L. Kirkland]

This one checks nearly every box for Trump’s right-wing and faux libertarian supporters.

First, it involves government subsidies for big business and the “forgotten man” class — the economically inadequate, uneducated residents of shambling towns.

Second, it arranges this redistribution of wealth at the expense of educated, successful, modern communities and residents.

Third, it exhibits a strong disdain for science, free markets, and economic reality, while sending a middle finger to environmentalists and those who dislike breathing coal-fire effluents.

Fourth, it offers little to no benefit to urban communities or black citizens.

About the only way this could get better for the Trump base would be if Trump could figure out how to include a bunch of abusive arrests of innocent blacks or people with advanced degrees.

Carry on, clingers.

[Tony]

Coal people can surely afford bootstraps just as easily as urban blacks. They’re probably far more likely to be wearing boots, even.

[Rev. Arthur L. Kirkland]

Not necessarily. After the tithe at the faith-healing meeting, and a visit to the corner for a handful of street pills needed to get through another deplorable day, there might not be much left for bootstraps.

Plus, if these folks were interesting in bootstraps, they would have made much different decisions for decades.

[Sevo]

Rev. Arthur L. Kirkland|6.1.18 @ 6:23PM|#
“Not necessarily. After the tithe at the faith-healing meeting, and a visit to the corner for a handful of street pills needed to get through another deplorable day, there might not be much left for bootstraps.”

Keep beating that strawman, you pathetic piece of shit.

[Tony]

That’s not a strawman, it’s both an insult and an accurate description of the human waste that thought it would be a good idea to get into politics and control the country.

[iffickck]

It really is detestable that you sneak in here constantly trying to get the last word, and running from confronting your stupidity and hypocrisy.

[Sevo]

“That’s not a strawman, it’s both an insult and an accurate description of the human waste that thought it would be a good idea to get into politics and control the country.”

One of our resident imbeciles here to explain that the other imbeicile’s straw man isn’t a strwman if this were a different site!
Thanks, Tony, we need to be reminded on a regular basis of your abysmal stupidity, even if you don’t get around to doing so until later.

[Elston G]

What side of the issue pertaining to the topic of the article are you on?

The corporate socialism and cronyism for the coal industry?
Or do you actually have principles?

[Last of the Shitlords]

Arty, you should be taken to the vet alongside Tony and also put down. You have no place among humans.

[iffickck]

He clearly hates himself. Let him wallow in it.

[Rev. Arthur L. Kirkland]

Be nice, or your betters may decide to start forcing all of this damned reason, science, tolerance, modernity, education, and progress down your right-wing throats sideways.

[hello.]

With your low-T pills and kitchen spoons? Lol. It’s hilarious how miserable you are about your pathetic literal and metaphorical impotence. Imagine fancying yourself such an intellectual and brought so low as to be ruled and dominated economically and physically by people you consider your inferiors. And all the while they are living happily and healthily utterly unaware of your sad existence. I’m so glad that you come here to share it with us.

[Rev. Arthur L. Kirkland]

Living happily? Why the reports of a populist revolt by people muttering about “taking their country back” (after decades of all of this damned progress) — people dumb and desperate enough to figure giving a middle finger to their betters is a plan?

Economic domination? Or economic despair among uneducated, unskilled residents of can’t-keep-up towns?

Living healthily? The people gobbling street pills by the handful, chugging cheap sixers, keeping the tobacco industry alive, and heading to Hardee’s to try to get through another desolate day? Claiming you sneak in at 239 pounds is not a fitness program.

Other than that, great comment.

[Elston G]

Report of that useless comment as spam.

[General Skarr's Prize Petunias]

So, black unemployment is at a fifty-year lull, and the gap between black and white unemployment is pretty much the lowest it’s ever been, but Trump hates black people.

Carry on, clinger.

[Yellow Tony]

I don’t think Trump hates anybody. He’s too busy slathering women’s meat holes with MickyD grease and then ceremoniously pounding the shit out them as if he were Alabama Man dishing out sweet justice on his dumb broad of a wife.

[DenverJ]

Fourth, it offers little to no benefit to urban communities or black citizens.

You racist dumbass. PJM serves all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia. There are very large urban and black communities effected. Maybe not for the better, bit in the exact same way rural and white communities will be effected.

[Rev. Arthur L. Kirkland]

“Learning” economics and reasoning from homeschooling (with downscale parents) or backwater religious schooling has consequences.

The beneficiaries of this nanny state government action and consequent wealth transfer will be rural white miners (West Virginia, Wyoming, backwater Pennsylvania) and coal operators.

Your mom apparently couldn’t distinguish “effected” and “affected.” You are continuing the family line of ignorance.

Carry on, clinger.

[hello.]

“Learning” economics and reasoning from homeschooling (with downscale parents) or backwater religious schooling has consequences.

It surely does. It makes the student three or four-fold better educated than you are.

[Rev. Arthur L. Kirkland]

Get an education. Start with standard English, focusing on punctuation.

[JoeBlow123]

“Carry on, clingers.”

If you are truly a real human being and not some troll account you must be one of the most noxious pieces of human trash.

[hello.]

It’s one of Mikey Hihn’s many sockpuppet accounts. He breaks this one out when he’s feeling especially frustrated about his declining mental faculties and needs to lash out at the world that is rapidly fading in his rearview mirror on the highway to his merciful relapse of brain cancer.

[esteve7]

https://www.youtube.com/watch?v=lITBGjNEp08

[Jerryskids]

If you can’t make money running a public utility/government monopoly, you’re a really bad businessman. There’s no competition so there’s no incentive for efficiency and you operate on a cost+ basis so there’s actually an incentive to be inefficient, yet most people can’t conceive of how the hell you’d possibly get water and gas and electricity and cable TV any cheaper and better if there were the inefficiencies of duplication of services. You’d have to pay for multiple sets of water and gas lines and multiple sets of electrical wires and TV cables so the price would naturally have to go up! they say. And yet somebody’s got to pay for the multiple sets of infrastructure that go into the Kroger and the Publix and the Ingles and the Food Lion and the Walmart all within a few miles of each other and bread doesn’t cost $15 a loaf thanks to the duplicate buildings and employees and electric bills and trucking invoices the consumer has to pay for – and Bernie Sanders is the only one I know of who’s stupid enough to say having a single monopoly bread store operating as a public utility would result in cheaper, better bread. But apparently lots of people think that way, even if they don’t realize it.

[Sevo]

Jerryskids|6.1.18 @ 8:35PM|#
“If you can’t make money running a public utility/government monopoly, you’re a really bad businessman.”

REALLY bad!

[Yellow Tony]

(Supposed) ladies and gentlemen, I challenge you to find one thing that can’t be justified by merely mentioning “national security.”

[General Skarr's Prize Petunias]

Lickin’ Crusty’s Pooper!

[Yellow Tony]

By forgoing the slathering of Crusty’s perky anus with a human (?) mouth penis, we are risking our citizens’ safety and national security since Crusty’s dry, un-licked ass mouth will otherwise spew damp and hazardous gas that will make Yellowstone’s eruption look and smell like an anorexic orphan girl’s dainty queef.

[Sevo]

Well, the best I hoped for 11/10/16 was a SCOTUS appointee who wasn’t willing to screw the pooch.
We’ve gotten far better than that, but we also get real bone-head moves like this.

[Yellow Tony]

This wouldn’t have happened if McAfee was elected.

[Sevo]

“This wouldn’t have happened if McAfee was elected.”
And not if I were elected either. Pretty sure I had a better chance than McAfee; at least you can get me off your computer.

[buybuydandavis]

”
The folks who run the power grid at PJM Interconection don’t think there’s a looming supply reliability problem.
…
The PJM electrical grid is more reliable than ever, with 23 percent reserve margins and billions of dollars of new investment.
”

None of that argues that the grid will be reliable if the companies currently headed toward bankruptcy go under and will no longer provide energy to the grid.

That’s the purported emergency. That if they go under, the grid will be unreliable. I see no analysis of that whatsoever in the article.

Sad.

[iffickck]

shush, the Trump haters are emoting.

[buybuydandavis]

I know.

That was for Ron. He is the last journalist standing at Reason, and I hate to see his standards slipping.

(Though ENB did write up something pretty good the other day.)

[hello.]

(Though ENB did write up something pretty good the other day.)

Did she doxx another frat boy on Twitter between bouts of giggling about her first blowjob when she’s 40?

[Elston G]

In this case you are in favor of corporate socialism then?

[Unlabelable MJGreen]

Christ, what a stupid asshole.

[iffickck]

Why are you introducing yourself?

[NotAnotherSkippy]

While New England’s power grid operator predicted they would have enough energy supplies to meet demand this winter, they admitted there could be problems if record-low temperatures set in.

“While New England has adequate capacity resources to meet projected demand, a continuing concern involves the availability of fuel for those power plants to generate electricity when needed,” grid operator ISO New England reported in November.

“During extremely cold weather, natural gas pipeline constraints limit the availability of fuel for natural-gas-fired power plants,” the grid operator noted.

That’s exactly what is happening right now.

Unrelenting cold since late December has caused energy demand to spike, pushing up prices and straining supplies. New England power companies are struggling to keep up with demand.

TRENDING: Grassley: Fusion GPS Founder Gave ‘Extremely Misleading’ Testimony on Trump Work

New England’s current energy woes are the result of years of state and federal policies aimed at closing coal and oil-fired power plants, largely as part of the region’s effort to fight global warming.
…
“Further, the retirement of a 1,500 MW coal- and oil-fired power plant in May has removed a facility with stored fuel that helped meet demand when natural gas plants were unavailable.”

Huh.

[NotAnotherSkippy]

(cont.)

And how did those cheap “renewables” that Ron loves so much do? Output dropped 5% during the cold snap. But don’t worry, EIA doesn’t include the cost of backup power in its LCOE estimates, but it does include a demon tax of $15/ton of CO2.

[magellannh]

New England definitely has a problem with ng pipeline constraints on the 5-10 coldest days of the year. The trouble is that it’s not worth spending billions building a pipeline to cover such a short-term shortage. If you amortize the cost of the pipeline over only the 10 days a year it’s needed, the cost for energy during those days is insanely high. There are much cheaper ways to cover the gap and that’s what ISO NE is trying to get done (eg incentivize gas & oil storage, get hydro from canada, build transmission lines to NY, etc).

Interestingly, similar to what happened during the polar vortex in 2014, during the 2018 cold spell coal was actually part of the problem. A large amount of coal fired capacity was unavailable during the crunch because coal conveyors froze and the plants had other mechanical problems caused by the weather. To make things worse, even nuclear couldn’t save the day because a storm took out a transmission line connecting a large nuke plant to the grid.

[NotAnotherSkippy]

Good thing wind farms aren’t at all critically dependent on transmission lines.

Cost has nothing to do with the insufficient pipeline capacity in NE. Green NIMBYISM and the stupidity that only education can bring does.

[magellannh]

The insufficient pipeline capacity is all about cost for me.

I’d be a strong proponent of the pipeline if it was a merchant project like Northern Pass (which I support). All things equal, I do think more pipeline capacity would be better for the region. The problem is that the pipeline can’t get financed unless they transfer all the risk onto ratepayers. That tells us something important about the project’s economic viability.

Experience has taught us that usually when a project needs government support to get built, there’s a good chance it’s not economic and will end up costing taxpayers or ratepayers in the end.

[NotAnotherSkippy]

And as to the ROI on expanded pipeline capacity:

The increase in the cost of energy services over the two-week period from December 27 to January 9 was $288M per day, equivalent to $98 per MW, compared with costs from the preceding two-week period, and $225M per day, or $73 per MW, higher than the following two-week period that featured a short return of extreme cold. This, in effect, represents a value of resilience (Exhibit 1-13), which, during the BC, rose to $3.5 billion.

$3.5BB builds a lot of pipeline, especially when it could have been contracted for hard demand instead of the government mandated renewables which you seem to not have any issue with. Basically wind/solar are what I’ll call the socialist solution: they get all the benefit but when push comes to shove you get to pick up the tab.

[magellannh]

A much cheaper approach would be to have incentives in place to ensure oil reserves are at 80-90% capacity at the end of December instead of 68%. 20% more fuel in those tanks would have made this a non-event.

They could also increase penalties for reneging on capacity agreements so ng and oil generators have more skin in the game and get hit harder if they can’t fulfill their obligations. That’ll incentivize the oil generators to purchase firm trucking and rail transport contracts and also fund things like the ng storage tank proposed for Epping.

[magellannh]

I suspect we may agree about the problem with NIMBYism overall. It’s frustrating how easy it is for a small number of opponents to stop projects and how even Republicans are unwilling to overrule these vocal minorities and prevent them from imposing significant costs on our economy.

[NotAnotherSkippy]

You mean that red bastion of the New England?

[magellannh]

I was talking about NH specifically.

[NotAnotherSkippy]

To further illustrate the point:

North American Electric Reliability Corporation (NERC) also analyzed the Polar Vortex. It
noted that installed capacity across the Eastern Interconnect and ERCOT was 40 percent natural gas, 31
percent coal, and 19 percent nuclear. With respect to outages found that while nuclear was mostly unaffected and coal outages were 26 percent of the total, natural gas units composed 55 percent of total outages. This finding led to NERC’s conclusion that system planners need to pay particular regard to the performance of
natural gas units during extreme weather events.

And then these two observations:

Wind and solar capacity increased by 19.6 GW (nameplate); however, only 2.6 GW of that increase is anticipated by the regions at peak in planning studies based on historical peak period performance.

So basically you can count on about 15% of your green grid when you actually need it. Good thing that intermittency cost isn’t accounted for.

[magellannh]

It is accounted for. afaik, wind and solar can’t get capacity payments unless they have storage.

[hello.]

You forgot the Ron Nye the Science Guy modus operandi. Vocally support the financially ruinous government regulations that make it impossible to operate coal or nuclear plants, ignore the hundreds of billions of dollars of subsidies required to bring “green” alternatives within in the realm of being competitive, then histrionically bitch about how it is a violation of free market principles to remove the regulatory barriers to operating coal and nuclear plants and/or remove the subsides, or hell even account for the subsidies, underpinning the green alternatives while also ignoring the practical limitations of generating and transmitting the intermittent and unreliable green alternatives.

[Elston G]

Are you under the impression that fossil fuel industry doesn’t get subsidies and doesn’t utilize tax expenditures?
You don’t know that coal energy has been able to utilize a market failure and socialize the costs of their production for over a hundred years?
You just might be a corporate socialist.

[crufus]

Coming soon: regulations protecting pagers, fax machines, Blockbuster, 8-tracks, laser disks, Walkman, whale oil, rotary-dial phones, Pet Rocks, 56K modems, steam locomotives, floppy disks, punch cards, Trump Airlines, Trump casinos, Trump Mortgage, Trump Steaks, and Trump University.

[Rev. Arthur L. Kirkland]

You didn’t include enough items from the ’50s.

You figure right-wingers are kidding when they pine for the ‘good old days?’

That those ‘good old days’ never existed isn’t even a speed bump for conservatives.

[Canman]

The case for saving nuclear plants looks strong to me. They get excluded from renewable portfolio standards when France has shown that they can almost fully replace fossil fuel electricity generation, which has not been demonstrated with renewables.

Gas prices can be volatile and it still emits CO2.

[Greg F]

…and it still emits CO2.

So do you.

[Elston G]

Well I couldn’t tell who supports Trump or gives him a pass on this issue. Too many snowflakes crying about Tony and the good Rev.

[NotAnotherSkippy]

A fraction of what the green mob steal from me each year.

[Elston G]

Green mob? How are you getting stolen from?