Can the U.S. blame Canada for power plant failures?

By Saqib Rahim | 12/01/2017 07:23 AM EST

The Brayton Point Power Station sits on the shores of Mount Hope Bay in Somerset, Mass.

The Brayton Point Power Station sits on the shores of Mount Hope Bay in Somerset, Mass. Benjamin Storrow/E&E News

When New England’s last major coal plant shut down in May, it threw the livelihoods of 170 employees into jeopardy.

But over the course of this year, the operator of the Brayton Point Power Station, Houston-based Dynegy Inc., used an unusual argument to secure support from the U.S. Labor Department. Dynegy said Canadian power imports were one driver of the plant’s closure, so the workers should be eligible for the same program that helps manufacturing workers displaced by foreign trade.

Blame Canada? For harming U.S. power plants?


In an August decision, the Labor Department’s Employment and Training Administration (DOLETA) said yes.

"The Department of Labor determines that increased customer reliance on imports of articles like or directly competitive to those articles produced by Brayton Point Energy, LLC contributed importantly" to layoffs and reduced power sales there, a DOLETA official wrote.

The ruling comes as the U.S. electricity trade — much like the trade of goods and services — is in flux. President Trump has blasted trade deals, including the North American Free Trade Agreement, as being stacked against American workers. He has directed his negotiators to demand concessions from Canada and Mexico.

Meanwhile, the energy transition in the United States seems to be opening up sales opportunities for cheap, renewable Canadian power. In New England, net power imports from Canada have risen more than a quarter since 2011 (Energywire, Sept. 21).

Is Canadian competition really threatening U.S. power jobs, as foreign trade has threatened U.S. automakers and steelmakers in the past?

That’s debatable. Power companies usually point to cheap shale gas, and Obama-era coal regulations, as the prime drivers of retirement.

That hasn’t stopped coal- and nuclear-plant workers from making their case to DOLETA. This year, the office fielded applications pertaining to the Vermont Yankee Nuclear Power Station and the Palisades Power Plant in Michigan, both operated by Entergy Corp. Both applications cited Canadian competition.

Yankee was approved. Palisades’ application was withdrawn, as the plant’s life was extended.

The argument doesn’t always work. In February, DOLETA denied the application by workers at a Dynegy-run coal plant in southern Illinois.

And in the depths of the oil price crash, DOLETA was often unconvinced by arguments that foreign oil production was to blame. In fiscal 2015, the office denied 70 percent of the applications it received from the mining, quarrying, and oil and gas extraction sector, according to an annual report.

Massachusetts state Rep. Patricia Haddad (D) was one of those who lobbied on behalf of Brayton Point.

"We were able to make the case that Canadian hydro was displacing them," she said. "Some would argue that it’s a stretch; we argued that no, this is very real."

Brayton Point was already on track to retire when Dynegy bought the 1,488-megawatt plant in 2014. The seller, Energy Capital Partners, had chosen to shutter the facility after it failed to bid into an auction for future power sales.

Dynegy acquired the plant as part of a larger 10-plant transaction. It explored options to retrofit the plant, according to a company spokesman, but it ultimately chose to let the closure proceed as originally scheduled, by June 2017.

In December 2016, Dynegy applied to the Labor Department for support under a program called the Trade Adjustment Assistance Program. The program is meant to help workers who have been displaced by foreign trade with training, income and other support.

Dynegy said all the workers at Brayton Point would lose their jobs "in part due to the market fundamentals that allow for the import of power produced in Canada to flow into New England."

Sen. Elizabeth Warren, Sen. Ed Markey and Rep. Joe Kennedy, all Democrats from Massachusetts, wrote a letter of support echoing Dynegy’s argument; it was addressed to then-Labor Secretary Tom Perez.

But a DOLETA official denied the petition in March, saying the plant didn’t seem to have been harmed by foreign trade and that its sales actually seemed to be up. Dynegy asked Labor to reconsider the case. And in April, Warren, Markey and Kennedy wrote another letter of support, this time addressed to Norris Tyler, the administrator of DOLETA.

DOLETA undertook the review, and in August, it said it had received information that showed trade "contributed importantly" to the layoffs at Brayton Point.

The approval will go a long way for the laid-off employees, said John Sousa, a program manager with the Fall River Career Center who has been involved with the Brayton Point workforce since 2013.

"We call it the Cadillac of programs because they have a lot more services; it’s a federal program," he said.

Sousa said the program gives workers up to 2 ½ years of support for their career transition, compared with a less-Cadillac program that gives them a year.

Some career transitions, such as becoming a truck driver, can be completed in four to six weeks. But if someone wants to go back to college, Sousa said, the extra years help.

"It’s on an individual basis," he said. "Each individual makes the choice of what he wants to do."