DOE Coal rule might help client of ex‑lobbyist who crafted it
The official who’s leading the charge for the Trump administration’s effort to subsidize coal plants is a longtime lobbyist who represented a troubled Ohio utility that stands to directly benefit from the proposed change.
Sean Cunningham lobbied on behalf of FirstEnergy Corp. for nearly a decade before becoming executive director of the Department of Energy’s Office of Energy Policy and Systems Analysis this year.
Cunningham has played a key role in crafting the controversial proposal, according to four sources familiar with the proposal who spoke on the condition of anonymity.
The former lobbyist has been deployed by DOE to defend the rule in public and private in recent weeks, seeking to smooth over tensions with industry and appearing at a recent Bipartisan Policy Center event to tout the plan.
His efforts have failed to assuage some industry critics, who believe the administration’s initiatives have gone beyond helping the coal industry to providing advantages to specific businesses.
“This is all about serving one or two companies,” said one industry official who opposes the rule. “The precedent is so bad on so many levels.”
The Energy Department proposal, which would pay coal and nuclear plant owners for storing 90 days of fuel on-site, has attracted powerful opponents at some of the nation’s largest power generators.
NRG Energy Inc. and Dynegy Inc. have come out against the plan, even though they would likely benefit from the new revenue stream it would provide (Energywire, Oct. 25). They argue the rule would distort wholesale markets and send electricity prices soaring.
FirstEnergy, meanwhile, has emerged as one of the loudest public champions of the plan. In comments to the Federal Energy Regulatory Commission, the body that will ultimately decide the fate of the Energy Department plan, the company predicted dire consequences if baseload power plant retirements continue.
“Ultimately, closures of nuclear and coal-fired generators will place the electric grid at risk of failure — if that risk does not exist already,” FirstEnergy wrote.
Those comments come during a period of uncertainty for the Akron, Ohio-based utility. Depressed power prices and stagnant demand in the PJM Interconnection, a wholesale market stretching from Maryland to Illinois, have pushed many of FirstEnergy’s coal and nuclear plants to the margins.
The FirstEnergy subsidiary that operates the company’s power plants is mulling a bankruptcy filing. The company’s CEO, Chuck Jones, reportedly joined coal magnate Robert Murray in lobbying President Trump personally to intervene and prevent the bankruptcy (Energywire, Aug. 23).
Jones recently downplayed his advocacy, telling financial analysts during a recent conference call, “I don’t think the DOE initiative has anything to do with FirstEnergy despite what’s been reported in some of the media.” FirstEnergy, he added, remains intent on exiting the merchant generating business regardless of how DOE’s proposal turns out.
The Energy Department plan could nevertheless deliver the company a boost, analysts said. A report by Energy Innovation and the Climate Policy Initiative, which advocates for a transition to clean energy, estimates FirstEnergy could reap up to $500 million annually.
FirstEnergy could still benefit from the DOE plan even if it exits the merchant power generating business, said Paul Patterson, a utilities analyst at Glenrock Associates.
“The residual benefit would be a potential mitigation to any [bankruptcy] claims event or, depending on what happened, some increased value for the units,” Patterson said. “The better that business is, the better it is for FirstEnergy.”
In Cunningham, FirstEnergy has a long-standing ally within the administration. Cunningham began lobbying for FirstEnergy in 1999 during his first stint at the law firm Balch & Bingham LLP, according to Senate lobbying disclosure records. The Ohio utility remained a client through 2001.