Trump Officials Still Pushing for a Coal Bailout, Regulator Says

(Bloomberg) -- High ranking officials in the Trump administration are still pushing to bail out money-losing coal plants, more than a year after an earlier proposal to revive the industry failed.

Any new effort to save coal plants may find a friend in Kentucky Republican Neil Chatterjee, now chairman of the Federal Energy Regulatory Commission, the very agency that rejected the previous plan.

According to Cheryl LaFleur, a Democratic commissioner whose departure this month leaves the agency with a Republican majority, efforts to rescue coal are not dead.

“We certainly still see people in the administration -- highly placed people in the administration -- make comments about the need to sustain U.S. coal so I’m not sure the issue is gone,” LaFleur said in an interview.

Rescuing coal-fired power plants that have seen their profits squeezed by cheaper natural gas and renewables would make good on President Donald Trump campaign promise to revive the U.S. coal industry. The commission last year rejected one such plan put forward by Energy Secretary Rick Perry, saying it was illegal. But as Trump’s re-election campaign get underway, the issue may get renewed attention.

LaFleur’s departure from the commission may also smooth the path for such efforts. When LaFleur, the agency’s longest-serving commissioner, leaves at the end of August, Republicans will hold a 2-1 majority under Chatterjee, a longtime champion of the coal industry who once advocated for giving coal plants short-term financial assistance to curb retirements.

Since taking the helm of the agency last year, Chatterjee has been mum on the possibility of reviving efforts to boost coal. He has said he plans to further engage grid operators and states on the issue of fuel security. He’s also pledged not to put the thumb on the scale to favor any one fuel over another.

In the meantime, underlying concerns around premature plant shutdowns persist. LaFleur, who has opposed subsidizing uneconomic coal plants, warned: “People should be vigilant to the decisions the commission is making on resource competition in the markets.”

Balance Shift

Last week, the agency ordered the nation’s biggest grid operator to halt a closely-watched power auction as it grapples with hundreds of millions of dollars in out-of-market subsidies created by some states to rescue plants. That came just days before Ohio became the latest state to clear subsidies for ailing nuclear and coal plants at the expense of renewables.

LaFleur’s exit from the agency could shift the balance on several other issues at the commission, especially climate.

Divisions over how far climate change should be factored into its deliberations have been a regular feature at the agency this year. Even though LaFleur sided with her Republican colleagues to break a deadlock that’s paved the way for five LNG export projects to be approved since February, she’s said the commission should still be doing more to evaluate the climate-related impacts of energy infrastructure. If it doesn’t, the courts will force their hands, she said.

To contact the reporter on this story: Stephen Cunningham in Washington at scunningha10@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Catherine Traywick, Mike Jeffers

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