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Trump plan to bail out coal industry punishes red states the most

Trump plans to enrich his rich crony friends at the expense of American consumers.

President Donald Trump embraces Energy Secretary Rick Perry June 29, 2017 in Washington, DC. On Friday, Trump called on Perry to bailout money-losing coal plants by raising U.S. electricity rates: CREDIT: Kevin Dietsch-Pool/Getty Images
President Donald Trump embraces Energy Secretary Rick Perry June 29, 2017 in Washington, DC. On Friday, Trump called on Perry to bailout money-losing coal plants by raising U.S. electricity rates: CREDIT: Kevin Dietsch-Pool/Getty Images

President Trump has ordered Secretary of Energy Rick Perry to take “immediate steps” to bailout unprofitable coal and nuclear plants.

This move, initiated on Friday, will inevitably increase electricity rates and pollution for all Americans. Perry is already drafting a plan that would prevent grid operators from replacing dirty coal power with cheaper and far less polluting natural gas, solar, and wind power.

Those hardest hit by Trump’s order will be the states where the most money-losing power plants reside. And, ironically, the most uneconomic coal plants are in the Southeastern states, which overwhelmingly voted for Donald Trump.

Indeed, in March, Bloomberg New Energy Finance (BNEF) released a detailed analysis of the most unprofitable plants, which “paints a particularly bleak picture for coal plants in the regulated Southeast”. As the chart below demonstrates, the biggest money losers are represented by the large, dark red dots.

The coal plants losing the most money are the dark red dots.
The coal plants losing the most money are the dark red dots.

According to a memo obtained by Bloomberg News, the Department of Energy (DOE) is already putting together a plan to use emergency authority (provided under two federal laws) to force the operators of the electric grid to purchase power from a list of designated plants for two years.

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Invoking the laws, however, requires some sort of national security emergency — so any such ruling is expected to be challenged in court. After all, there is no security threat posed by replacing expensive dirty energy plants with cheaper cleaner ones.

Indeed, the bigger security threat to Americans would come from continuing to run unprofitable coal plants — a move that will worsen climate change, perhaps the biggest preventable threat to US security today.

Nonetheless, on Friday, White House Press Secretary Sarah Huckabee Sanders released a statement saying the bailout of coal and nuclear plants is needed for national security purposes: “Impending retirements of fuel-secure power facilities are leading to a rapid depletion of a critical part of our nation’s energy mix, and impacting the resilience of our power grid.”

So-called “fuel-secure power facilities” are plants that have a large supply of fuel onsite and are therefore supposed to be more reliable.

But the problem for the new plan by Trump and Perry is that there is no evidence whatsoever that the retirement of money-losing coal and nuclear plants makes the electric grid less reliable and resilient.

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In fact, back in January, the Federal Energy Regulatory Commission (FERC) — which oversees the U.S. grid — unanimously rejected a very similar plan by Perry to raise consumer energy bills in order to bail out coal and nuclear power plants.

The unanimous vote was especially notable since 3 of the 5 commissioners are Trump appointees, including the new chair.

In its ruling, FERC slapped down Perry’s main argument that somehow cheap renewables (and natural gas) are forcing essential coal and nuclear plants to be shut down. They note that “the extensive comments submitted” by the grid operators “do not point to any past or planned generator retirements that may be a threat to grid resilience.”

Indeed, to make his case, Perry had to ignore his own grid study, which had made clear renewables were not a threat to power reliability.

The new Trump plan has uniquely broad opposition. “This has got to be one for the record books,” tweeted New York Times investigative reporter Eric Lipton. “Oil industry joins with solar and wind industry to condemn Trump admin plan to prop up coal industry by forcing electric grid to buy coal power. Oil/wind/solar as allies? Fascinating times.”

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The truth is that the only people who benefit from keeping money-losing plants open are rich coal barons like Bob Murray, a big Trump donor who has been pushing for this bailout for over a year.

Everyone else in the country — and most especially Trump’s own voters — would have to pay for this bailout, with higher electricity bills and with the public health costs that come from having dirtier air.