Signature Sponsor
The President Doubles Down on Bad Policy


November 7, 2022 - When President Biden boasted last week about closing coal plants all across the country, he meant it. The White House has already begun spinning and clarifying his remarks, but the President knew what he was saying because there’s a plan to do it.
Even as electricity and natural gas bills soar – up a startling 16% and 33.1% respectively over the past year – and the reliability of the nation’s power supply grows ever more tenuous, the Biden administration is actively working to accelerate coal plant retirements through a new regulatory onslaught from the U.S. Environmental Protection Agency (EPA). It was a plan put in place in the opening days of the administration and, despite the global energy crisis, soaring energy bills and biting inflation, the EPA – apparently at the President’s firm direction – isn’t blinking.
Senator Joe Manchin of West Virginia said in a statement, “Comments like these are the reason the American people are losing trust in President Biden and instead believe he does not understand the need to have an all-in energy policy that would keep our nation totally energy independent and secure.”
The Senator is right; the Biden administration does not seem to have a grip on the nation’s energy reality. Rich Nolan, National Mining Association (NMA) president, said, “President Biden’s comment on our nation’s coal capacity – which provides stability for millions of American households and businesses in a time of energy-driven inflation – is completely incompatible with the state of the U.S. electricity grid, which is teetering on the edge in many parts of the country.” He added, “U.S. consumers face an upcoming winter with some of the highest anticipated electricity prices in history. The nation’s foremost electricity reliability experts agree that forcing essential coal capacity off the grid – without reliable alternatives and the infrastructure to support them – will only deepen reliability and economic challenges.”
The U.S. coal fleet plays a critical role providing dispatchable fuel diversity, guaranteeing optionality to shield consumers from fuel price spikes, and working as a reliability backstop. Coal plants again and again come to the rescue to ramp up generation to meet peak power demand during bitter cold or scorching summer heat when other sources of power are too often unavailable. The fuel security and reliability provided by coal are the reason it remains the world’s leading fuel for electricity generation, why Europe is ramping up coal generation – turning back on once shuttered plants to pivot away from Russian natural gas – and why China is launching a coal plant building spree that will see it add more new capacity in the next five years than exists in total in the U.S. 
While the Biden administration is working diligently to push the U.S. coal fleet off the grid, those tasked with delivering affordable, reliable power are loudly warning against it. As the NMA’s Rich Nolan remarked, the nation’s reliability experts have it made it very clear we should be pumping the brakes on plant retirements, not trying to hit the accelerator. And on-the-ground reality is proving the point. According to reporting from Bloomberg, as many as 40 planned coal plant retirements have been postponed or scrapped due to supply chain issues for renewable power or acute grid reliability challenges where utilities and grid operators have made it clear closing plants would be reckless.
While blackouts in California and the grid catastrophe in Texas have made headlines, the entirety of the nation’s power supply is facing unprecedented challenges due to the speed at which we’re disassembling the grid we have and the power sources that have long underpinned it before we have reliable alternatives in place. The Wall Street Journal found that, “from California to Texas to Indiana, electric-grid operators are warning that power-generating capacity is struggling to keep up with demand, a gap that could lead to rolling blackouts during heat waves or other peak periods as soon as this year.” And now, this winter, New England is facing capacity shortfalls and warning it too could be facing blackouts.
In 2018, the North American Electric Reliability Corporation (NERC), the organization that oversees the reliability on the North American electric grid, warned of the threat posed by the rapid loss of baseload sources of power, namely coal capacity. S&P Global Market Intelligence characterized the report by writing, NERC “warns that an accelerated retirement of coal-fired and nuclear power plants over the next several years could lead to power outages, temporary shortfalls in surplus generation and transmission problems in several regions.” Every single one of those warnings has come to fruition.
Now NERC is warning that capacity retirements and the rapid remaking of the grid will pose tremendous challenges to reliability over the next decade. John Moura, director of reliability assessment and performance analysis at NERC, has said, “there’s clear, objective, conclusive data indicating that the pace of our great transformation is a bit out of sync with the underlying realities and the physics of the system.” He added that the energy disruptions seen in California and Texas “should serve as a wake-up call for the rest of the country.” Apparently, the Biden administration hasn’t gotten it.
NERC’s CEO Jim Robb recently pleaded for energy policy that better recognizes how essential existing dispatchable generation remains to grid reliability. “We need to retain the existing resources as long as we don’t have an alternative. That’s the issue,” he told Public Utilities Fortnightly. “My first bit of advice is to… manage the pace of change. The second bit of advice we give is don’t underinvest in bridge fuel or the bridge issues to get us from where we are to where we want to go.”
Federal Energy Regulatory Commission member James Danly has also expressed deep concern about grid reliability and the danger posed by casting aside dispatchable generation for intermittent power. Danly told Politico. “My grave, grave fear here is that what’s going to have to happen to focus people’s attention on the solutions that are necessary to ensure resource adequacy and ensure reliability is going to be some catastrophic event that demands our attention be given to these problems.”
And it’s not just the regulators. Utilities too aren’t pulling any punches about the nation’s mounting reliability challenges and the danger posed by the loss of more coal generation. David Tudor, chief executive of Associated Electric Cooperative Inc., which supplies power to 51 rural distribution cooperatives serving 2 million people in Missouri, Iowa and Oklahoma, told Missouri regulators that closing coal plants is “dumb.” He continued, “Our view is that most of the utilities in the United States are going too fast and going down the wrong path.” He went on to say, “It’s not that we’re not willing” to shut down coal plants, he said. “We’re just saying it’s dumb, and we don’t do dumb things. I don’t see any reason to get rid of something that works if we don’t have something to replace it.”
Curt Morgan, CEO of Vistra Corp., which operates the nation’s largest fleet of merchant power plants, told The Wall Street Journal, “Everything is tied to having electricity, and yet we’re not focusing on the reliability of the grid. That’s absurd, and that’s frightening. There’s such an emotional drive to get where we want to get on climate change, which I understand, but we can’t throw out the idea of having a reliable grid.”
The examples are nearly endless. The comments from utilities and grid operators to the EPA in response to new rules targeting the existing coal fleet are harrowing. The grid is in crisis and the role the existing coal fleet can and should play in getting us to the other side is a gravely important one. The Biden administration is racing down the wrong path on American energy policy when we need sound leadership more than ever. As Rich Nolan concluded in his response to President Biden’s comments on the coal fleet, “The global energy crisis is real and imposing costly burdens on people around the world and here at home; taking deliberate steps to intensify that crisis is reckless and unthinkable.”