Bloomberg Law reports that the Trump administration's moves to reignite the coal industry have states and the federal government at odds. States accuse the feds of interfering with energy generation plans that have been in the works for years.
The administration issued federal emergency orders to keep coal plants open despite plans between states and utilities that factor in plant closures and announced plans to send $175 million to coal operations to modernize plants.
Joseph Tomain, Dean Emeritus and Wilbert and Helen Ziegler Professor of Law at UC, told Bloomberg Law that states-which often regulate their electricity markets through their public utilities commissions-regularly ask utilities to submit plans that spell out what their energy resource mixtures will be in the future. And they want to make sure utilities follow those outlines, Tomain added.
Tomain has expertise and has published research in the areas including contracts, energy law and regulation, and regulatory policy.
Federal officials and some states debate whether the push to use coal will be more costly for energy.
Bloomberg Law reports the Department of Energy instructed utilities and energy companies to ask the Federal Energy Regulatory Commission, which governs wholesale electricity markets and interstate transmission, for any needed rate changes to carry out its orders. States, however, also have power over electricity rates because their public utilities commissions approve retail rates paid by the average person.
Tomain says that an area where states could challenge orders to keep coal plants open since they hold hearings to consider utilities' plans and can question an investment a utility is making.
"The utility is going to go, 'Hey, wait a minute, daddy made me do it,'" Tomain told Bloomberg Law. "States do have that power to really prevent those rates from being passed to consumers."
"It's going to be very interesting to see whether or not states actually exercise their rate-hearing power and deny the inclusion of whatever the local costs are going to be," he adds.
