Economists Calculate Customer Cost of Federal Power Plant Bailout Mandates

A new report by the Brattle Group, an economic analysis consultancy, looked at the U.S. Department of Energy’s (DOE) proposal to require customers to prop up uneconomic coal and nuclear power plants. It found that customers could be forced to subsidize the money-losing power plants to the tune of $34 billion, or higher.

According to the report, the DOE bailout order could cost customers as much as $70 billion “if power plant owners were also granted a return on their invested capital in addition to payments for operating shortfalls.”

The report was commissioned by industry associations including American Petroleum Institute (API), Advanced Energy Economy (AEE), American Wind Energy Association (AWEA), Electricity Consumers Resource Council (ELCON), Electric Power Supply Association (EPSA), and Natural Gas Supply Association (NGSA).

The OMA has been a steadfast opponent of state and federal bailouts for uneconomic power plants.

Members of the OMA Energy Group will be able to access custom cost impact assessments as more data become available.

All members are invited to attend the OMA Energy Committee meeting on August 15 at Owens-Illinois, Inc. in Perrysburg, Ohio. Register here. 7/26/2018