U.S. energy secretary urges incentives to keep coal, nuke power plants open

(Reuters) – U.S. Secretary of Energy Rick Perry has urged federal regulators to provide incentives to keep coal and nuclear power plants open, as a way to address “risks” to the resilience of the U.S. electrical grid, the Department of Energy said on Friday.

“The continued closure of traditional baseload power plants calls for a comprehensive strategy for long-term reliability and resilience,” Perry said in a letter to the Federal Energy Regulatory Commission (FERC). “States and regions are accepting increased risks that could affect the future reliability and resilience of electricity delivery.”

The administration of President Donald Trump has previously said the retirement of hundreds of coal-fired power plants and some nuclear reactors in recent years has undermined the ability of the grid to stand up to peak demand periods, including during severe cold winter weather.

Perry had commissioned a study in April to evaluate whether “regulatory burdens” imposed by past administrations, including that of former President Barack Obama, had hurt the grid by forcing shutdowns of baseload plants. Obama had sought to reduce the use of fossil fuels through the regulation of carbon emissions in a bid to combat global climate change.

That energy department report, released last month, urged incentives to boost coal-fired and nuclear power plants following a slew of closures, mainly spurred by competition with cheaper natural gas and the growth of solar and wind power technologies.

Perry asked the Commission to issue a final rule within 60 days requiring its organized markets to develop and implement reforms that would allow such plants that provide nonstop power and maintain at least 90-days of fuel supply on site, to fully recover their costs through regulated pricing.

Reporting by Nallur Sethuraman in Bengaluru; Editing by Bernadette Baum

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