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10/24/2017

AG Jepsen Joins With Colleagues in Opposing Federal Rule to Subsidize Coal and Nuclear Power Plants

Comments Sent to the Federal Energy Regulatory Commission

Attorney General George Jepsen has joined a coalition of states to oppose a notice of proposed rulemaking by the U.S. Department of Energy to subsidize aging, economically inefficient coal and nuclear power plants. 

The attorneys general argue that the proposed rule mandates that customers subsidize inefficient power plants, including highly polluting coal-fired plants and jeopardizes the country’s competitive markets for wholesale electric power, adding billions to customers’ bills. The Attorneys General submitted their comments yesterday to the Federal Energy Regulatory Commission (FERC).

The proposed rule, spearheaded by Department of Energy Secretary Rick Perry, would exempt coal and nuclear power plants from having to compete in the market with other sources of power, such as natural gas, wind, and hydropower. Instead of customers buying the best product at a competitive price, the proposed rule would require customers to pay the coal and nuclear power plants for all of their expenses plus a profit, regardless of inefficiencies or above-market costs.  

"The Department of Energy's plan seeks to radically change the electric generation markets by subsidizing certain coal-fired and nuclear power plants despite their high cost and environmental harm. This proposal could cause Connecticut consumers to pay considerably higher utility rates," said Attorney General Jepsen. "Along with colleagues in other states and in state government here in Connecticut, I am committed to protecting consumers and the environment.  I will continue to aggressively oppose this proposal and others that unnecessarily raise ratepayer bills or threaten our progress on climate change."

The comments by the attorneys general, state agencies, and consumer advocates, challenge the proposed rule’s underlying assumption that electric system reliability is in danger because aging, uneconomic coal-powered plants are retiring. To the contrary, the bulk power system is reliable today, and the tools are in place to ensure that it will continue to reliably keep the lights on in the future. The attorneys general note that many states have already retired aging, uneconomic coal plants and are successfully integrating clean energy resources and innovations that benefit system reliability, while at the same time lowering energy costs and improving public health and air quality. Conversely, the proposed rule will burden customers with additional costs and risks, undermine state energy laws and policies, and threaten the progress states have made in reducing emissions.

The comments also challenge the highly unusual and rushed review process of the proposed rule. Secretary Perry's directive to complete action on the rule in 60 days without providing necessary details denies stakeholders and public officials the ability to provide meaningful comment and prevents FERC from fulfilling its responsibility to act in a deliberative and independent manner. 
 
Since it was announced, the proposal has been criticized by many sectors of the energy industry, Members of Congress, consumer advocates, environmental groups, and a bipartisan group of former FERC commissioners.

In addition to Connecticut, the attorneys general of California, Illinois, Maryland, Massachusetts, North Carolina, Oregon, Rhode Island, Vermont, and Washington joined in filing the comments. The Connecticut Department of Energy and Environmental Protection, the Rhode Island Division of Public Utilities and Carriers, and the New Hampshire Office of Consumer Advocate are also part of the coalition.

Assistant Attorneys General Robert Snook, Michael Wertheimer, John Wright, and Matthew Levine, head of the Environment Department, are assisting the Attorney General with this matter.

Click here to read the coalition's comments on FERC's notice of proposed rulemaking.

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