West Virginia Sen. Joe Manchin (D) is stepping up his efforts to save coal. On Wednesday he sent a letter to Energy Secretary Rick Perry and Defense Secretary James Mattis urging them to use a Cold War-era law to boost the profits of coal companies in his state.
The letter comes as Manchin awaits a response from the White House on the issue. He first wrote to President Trump last week asking him to examine the Defense Production Act of 1950 as a way to guard against the loss of coal-fired and nuclear power plants.
The campaign to use the 1950 statute represents yet another attempt by pro-coal politicians to get the federal government involved in stabilizing the profits and shareholder value of failing coal companies and owners of nuclear fleets. Federal lawmakers in Appalachia, in particular, have pleaded with the federal government to help coal companies, many of which are their top campaign contributors.
Manchin, a conservative Democrat who is seeking reelection this year in a state now controlled by Republicans, and whose citizens strongly favor Trump, has become one of the most vocal lawmakers in support of the federal government taking control of parts of the nation’s coal industry.
“The security of our homeland is inextricably tied to the security of our energy supply,” Manchin wrote in his letter to Perry and Mattis. “Therefore, the ability to produce reliable electricity and to recover from disruptions to our grid are critical to ensuring our nation’s security against the various threats facing our nation today — whether those threats be extreme weather events or adversarial foreign actors.”
The Energy and Defense departments had not responded to requests for comment from ThinkProgress on Manchin’s letter at the time this article was published.
The Defense Production Act of 1950 allows a president to nationalize private industry to ensure the U.S. has resources that could be needed in time of a war or after a disaster — two situations that are not happening right now. President Harry Truman used the law in late 1950 to cap the price of steel as part of a war mobilization effort against Korea.
The statute classifies energy as a “strategic and critical material,” allowing the president to order businesses to accept contracts for materials and services.
Manchin, in his letter, said that coal-fired and nuclear power plants “continue to do a lot of the heavy lifting when the bulk power system is put to the test.”
Grid operators and reliability experts, however, see no threat to grid reliability from planned retirements of coal and nuclear power plants. In response to claims that the mid-Atlantic and Midwest regions are facing a reliability crisis, for example, PJM Interconnection Inc. stated recently that “without reservation there is no immediate threat to system reliability.”
Nonetheless, Manchin and others continue to push proposals to prop up the coal and nuclear power industry. “I encourage you and your agencies to examine the Defense Production Act as a possible means of securing at-risk baseload power plants in an effort to enhance the security of our energy delivery systems and, therefore, our nation,” Manchin said in the letter to Perry and Mattis.
In 2017, the Trump administration tried to get proposals enacted that would help his friends in the coal industry. So far, the president and his industry partners have failed in their attempts to get customers to subsidize coal and nuclear plants. In January, federal regulators rejected a proposal submitted by Perry to offer special payments to these plants to ensure they stay open. The proposal would have provided guaranteed profits to the coal and nuclear industries.
Among power plant owners, FirstEnergy Corp. asked Perry to rescue its coal and nuclear plants, along with other companies’ plants located in the eastern United States, by declaring an “emergency” in the power industry. The request was widely panned by industry officials and experts, with one company describing the scenario as a “manufactured crisis.”
Earlier this week, FirstEnergy subsidiary FirstEnergy Solutions announced it had notified the Nuclear Regulatory Commission of its decision to permanently deactivate three of its nuclear power plants over the next thee years, citing “severe economic challenges.”
FirstEnergy Solutions filed for bankruptcy in early April. Only a few days before the bankruptcy filing, the debt-laden company asked Perry to use his department’s emergency powers — Section 202 (c) of the Federal Power Act — to keep its coal and nuclear power plants open.
According to reports from Bloomberg and E&E News, the Trump administration itself has been exploring whether to use the Defense Production Act as another way to help coal and nuclear generators.
FirstEnergy and the Trump administration are grasping for some rationale – any possible legal vehicle – to justify bailouts for clunky, old, and uneconomic power plants. https://t.co/uBc3ZspfDo pic.twitter.com/pH41VO3RDr
— EDF Climate & Energy (@EDFEnergyEX) April 25, 2018
“So now [Trump is] trying another legal stretch — using a Korean War-era law designed to ensure a stable supply of resources needed to protect the nation in a war,” the Environmental Defense Fund wrote in a blog post this week. “By speciously using the Defense Production Act of 1950, the Trump administration wants to try to keep struggling coal and nuclear power plants, like FirstEnergy’s, online.”
At an April 12 House FY’19 budget hearing for the DOE, David McKinley (R-WV) told Perry that an “emergency act is necessary if we’re going to have national security. I’m calling on you to use whatever powers you have.”
Perry welcomed McKinley’s remarks, suggesting he might favor Trump invoking the Defense Production Act. “Mr. McKinley, I hope your remarks have been televised and we can put them up, because you have succinctly made the point for exactly what needs to happen in this country from the standpoint of being able to protect the resiliency and reliability of your electrical grid,” Perry said.
“If you do not have sufficient coal and nuclear plants, the day is coming … that the national security of this country is jeopardized,” the Energy secretary said. “Political decisions that put people’s lives in jeopardy are inappropriate. I think the president understands that … and that’s exactly what we’re working on today.”