Perry grid plan could cause 27,000 premature deaths — study

Source: Sam Mintz, E&E News reporter • Posted: Monday, December 4, 2017

A new analysis of Energy Secretary Rick Perry’s plan to save coal and nuclear plants says it could have major costs for energy consumers and the environment.

Perry’s plan, now in the hands of the Federal Energy Regulatory Commission, would help save plants in certain electricity markets from premature retirement by allowing them to fully recover their costs and guarantee a profit.

The directive has earned widespread criticism, including from the oil and gas and renewable industries, which say it represents an unfair subsidy to uneconomic coal and nuclear facilities.

The coal and nuclear sectors, as well as some utilities whose generation portfolios largely consist of those technologies, have generally supported the proposal.

The new analysis from Daniel Shawhan and Paul Picciano with the think tank Resources for the Future say the plan — if enacted from 2020 to 2045 — would indeed prevent the retirement of around 25 gigawatts of coal generation capacity and delay the retirement of 20 GW of nuclear.

But Shawhan and Picciano, who conducted a simulation of the plan’s effects, say it would also cause 27,000 premature deaths from the increased emissions created by the coal plants that it would save.

The analysts also said the proposal would have an estimated cost of $263 billion during those years, $217 billion of which would be environmental damages.

“The results highlight the importance of estimating environmental net benefits, as they dominate the cost-benefit analysis of all of the policy variations considered,” they wrote.

The net cost for electricity consumers, the review found, would be $72 billion, while only resulting in $28 billion in net benefit for generators.

There was one alternative the authors offered that could yield positive net benefits overall: a scenario that only prevented the retirement of nuclear plants, but not coal.

RFF’s report is not the first to suggest that the costs of implementing the Perry proposal could be high, but it comes just 11 days before FERC is due to announce its decision.

Chairman Neil Chatterjee has said he wants to follow through on DOE’s directive, including implementing an “interim solution” that would help save coal and nuclear plants in the short term.

But Kevin McIntyre, who is set to join the agency any day and take over as chairman from Chatterjee, might decide to take the proposal in a different direction.