Trump Prepares Lifeline for Money-Losing Coal Power Plants

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U.S. President Donald Trump has directed Energy Secretary Rick Perry to take emergency steps to keep coal and nuclear power plants running, the White House said Friday, in what would amount to an unprecedented intervention in U.S. power markets.

There is no environmental argument for keeping open coal plants, which are the most carbon-intensive form of power.

But a draft memo circulated earlier this week indicates the administration might order electric grid operators to buy their energy from struggling coal and nuclear plants.

An increasing number of coal and nuclear plants have gone under in recent years while a cheaper and cleaner alternative, natural gas, has become more mainstream.

According to the draft memo, the Energy Department would exercise its emergency authority to order grid operators to give preference to plants "that have a secure on-site fuel supply" and which "are essential to support the Nation's defense facilities, critical energy infrastructure, and other critical infrastructure".

Murray has been seeking emergency action to boost his industry since previous year and has met with Trump to argue that federal help was needed to avert thousands of layoffs and maintain the reliability of the electric grid up and down the East Coast.

The Defense Production Act, adopted in 1950 at the start of the Korean War, allows the federal government to intervene in business to promote national security. The move would be one of the most direct efforts by Trump to make good on campaign promises to revive the nation's shrinking coal industry.

The draft memo also states that U.S. Defense Department installations are nearly entirely dependent on the commercial grid, furthering the argument that a reliable electric system is critical, Bloomberg reported.

Depending on the approach taken by the Trump administration, propping up coal and nuclear plants could cost the taxpayers anywhere from $311 million to $11.8 billion per year.

Perry in September asked the Federal Energy Regulatory Commission to consider "guaranteeing financial returns" for power plants able to "stockpile" 90 days worth of fuel on site.

Opponents of the new plan contend bailouts are a solution in search of a problem.

Invoking national security concerns could bolster the Trump administration's case in any legal challenges over the intervention, said Ari Peskoe, director of the Electricity Law Initiative at Harvard University.

"There is no need for any such drastic action", the company said.

The Trump administration's claims of energy security for keeping coal and nuclear plants online is not supported by the facts, as multiple power networks, including PJM, one of the biggest USA independent systems, point to a recent extremely cold "bomb cyclone" weather event in the United States northeast that showed the regional grid operating efficiently despite coal power plant closures, cited by Ars Technica.

"It's going to be tough to get a court to question DOE's factual finding - particularly if it relates to national defense", Peskoe said in an interview.

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