Yesterday, an independent government agency saved Americans from a massive de facto tax hike.
Energy Secretary Rick Perry had proposed a multibillion-dollar bailout of failing coal and nuclear power plants. He wanted to give these plants taxpayer-funded subsidies to keep them afloat. Luckily, the Federal Energy Regulatory Commission (FERC) made the right call and quashed the plan.
Perry's proposal -- commonly called the notice of proposed rulemaking, or NOPR -- would have granted government subsidies to any power plants capable of storing 90 days' worth of fuel supply on-site.
The only electricity generators that fit this description are coal and nuclear plants. Natural gas and renewables plants don't store their fuels on site.
The secretary's goal was to keep nearly bankrupt coal and nuclear plants operating, so they can produce electricity in case natural disasters or cyberattacks disrupt America's energy grid.
Fears of an electricity shortage are overblown -- the power grid is already resilient. According to Perry's own department, America's energy grid reliability is "adequate today despite the retirement of 11 percent of the generating capacity available in 2002."
Natural gas plants, in particular, are dependable. A recent Brattle Group study found natural gas "relatively advantageous" compared to other energy sources in terms of power grid reliability.
It's relatively easy for these plants to ramp up or slow down electricity generation in response to changing demand or emergency situations.
A DOE report released in August concluded as much. It did not find that the closure of failing coal and nuclear plants would lead to electricity shortages -- even though Perry hoped for such a conclusion to justify a coal and nuclear bailout.
Extending a financial lifeline to failing coal and nuclear plants wouldn't have been cheap. Perry's bailout would have cost taxpayers $10.6 billion a year. These subsidies would have helped just a handful of lucky corporations. Ninety percent of NOPR funds dedicated to nuclear energy would have been divvied up between five or fewer companies.
Regular Americans oppose this crony capitalism. Seventy-seven percent of voters in Pennsylvania, where lawmakers are trying to bail out nuclear company Exelon, agree that regulators shouldn't offer special treatment to specific corporations.
Perry tried to strangle free-market innovation by picking winners and losers. Such cronyism would thwart the continued rise of natural gas, which is now abundant thanks to the advent of hydraulic fracturing and other drilling technologies. In 2016, America generated more electricity from natural gas than from coal for the first time.
That's good news for the environment. Replacing coal with natural gas has helped reduced greenhouse emissions to levels not seen since 1988. It has also resulted in lower electricity prices for consumers.
The proposed coal and nuclear bailout was a terrible deal for taxpayers. FERC should be commended for refusing to funnel billions of our hard-earned dollars to prop up dying industries.
David Williams is president of the Taxpayers Protection Alliance.