So the Energy Department is hatching a new plan, according to a memo obtained by Bloomberg News, to force grid operators to buy electricity from coal and nuclear plants at risk of retirement, effectively keeping those failing power plants afloat.
The 41-page memo, which circulated before a National Security Council meeting, argues that “federal action is necessary to stop the further premature retirements of fuel-secure generation capacity.”
According to the memo, the Energy Department would exercise emergency authority under a pair of federal laws to compel grid operators to purchase electricity from a list of designated power plants for two years. During that two year period, the government would also conduct a study into vulnerabilities in the U.S. grid system.
According to Bloomberg, the move would signal an unprecedented intervention in the U.S. energy industry.
The move has been under consideration for months, with pro-coal politicians like Sen. Joe Manchin (D-WV) urging the president to use federal emergency powers to prevent the closure of coal and nuclear power plants. Some of Trump’s biggest donors — including coal executive and CEO of Murray Energy, Bob Murray — have also pushed for the move.
First Energy Corp. — a major electric utility company — has also urged Perry in recent months to use a Cold War-era law to rescue its failing coal and nuclear power plants. First Energy asked that the Energy Department create an order that forces grid operators to buy from coal and nuclear plants that have 25 days of onsite fuel supply for four years. First Energy recently announced that three of its nuclear plants would be retiring in the next few years.
The Trump administration has long championed the concept that coal and nuclear power plant retirements — which have been retiring in record numbers in recent years — pose a threat to the stability of the U.S. grid. Last year, Secretary of Energy Rick Perry commissioned a study that looked at how renewable energy might be forcing premature retirement of coal and nuclear plants, and thus contributing to grid instability.
A leaked draft of the report, however, found the opposite, concluding that coal and nuclear retirements were largely the result of “long-standing drop in electricity demand relative to previous expectation and years of low electric prices driven by high natural gas availability.” The draft also found that those retirements posed little threat to the stability of the grid, noting that “the power system is more reliable today due to better planning, market discipline, and better operating rules and standards.”
Perry, for his part, took a different approach in his letter included with the report’s final draft, arguing that renewable subsidies and certain regulations undermined the stability of the grid — essentially setting the stage for the emergency action outlined in the leaked memo.
Despite claiming in a 2011 presidential debate that the federal government should reassure the public that it is “not going to pick winners and losers from Washington, D.C.,” Perry has tried once before as energy secretary to prop up coal and nuclear, submitting a plan to the Federal Energy Regulatory Commission (FERC) last year that would have subsidized coal and nuclear plants. FERC unanimously voted to reject the proposal.
UPDATE: On Friday, the White House announced that Trump has officially ordered the Department of Energy to look into ways to save coal and nuclear plants from retirement. It’s unclear whether the department will pursue the plan outlined in the leaked memo, or some other plan.