The proposed regulation is based on some key arguments that contradict DOE's own expert analysis in the grid report. First, it assumes that coal plants are indispensable to keeping the lights on and meeting electricity demand.
To assure reliability, electric grids need to balance supply and demand in real time or risk cascading blackouts. One supplier shirking its responsibilities can lead to problems for all users of the grid. So we can think of reliability of supply as a positive externality, in the same way that pollution is a negative externality.
But unlike pollutants such as carbon dioxide, electricity markets have internalized the external costs and benefits of reliability to a significant extent. The detailed rules and regulations that govern power grid operations require utilities to have more generating capacity than they need. They also compensate some plants for standing by to provide power in case of emergencies. (Typically, these are natural gas plants that can start up quickly.) Power markets compensate producers for providing reliable capacity and penalize them when they fail to meet their obligations.
The proposed regulation also assumes that the resilience of the nation's electric grid is "threatened by premature retirements of power plants that can withstand major fuel supply disruptions caused by natural or man-made disasters." What kind of disasters are we talking about here? One example might be cyberattacks. There is no evidence that coal-fired power plants are less likely to be hacked, or will be quicker to recover, than natural gas, wind or solar generators.
Large-scale environmental events such as hurricanes, floods and extreme cold weather could also threaten grid resilience. There is redundant natural gas pipeline transportation capacity in much of the country, which reduces fuel supply risks substantially. Still, during some weather disruptions, coal rail networks could be more reliable than gas pipelines.
But after Hurricane Harvey, flooded coal piles forced one of America's largest coal plants in Texas to close two of its units and convert others to natural gas. Frozen coal piles and train derailments have kept coal plants elsewhere from operating during cold winter weather. A recent report by the Rhodium Group states:
"Of all the major power disruptions, nation-wide over the past five years, only 0.0007 percent were due to fuel supply problems. The vast majority were the result of severe weather knocking down power lines."