President Donald Trump’s emergency plan to rescue failing coal and nuclear plants has attracted vehement opposition from industries that stand the most to lose from its implementation.
A memo released Friday details the Trump administration’s plan of action to keep unprofitable coal and nuclear facilities from closing their doors. According to the plan, the federal government will purchase electricity from at-risk plants for two years using emergency authority granted under the Defense Production Act and Section 202 of the Federal Power Act. Both of the federal laws — created decades ago for emergency situations, such as devastating weather or war time — will keep a specific list of failing plants profitable. Over 80 percent of the coal subsidies would go to five companies — FirstEnergy, Dynegy, NRG, Talen Energy and AEP.
Release of the memo comes after months of speculation that the Trump administration would come forward with a plan to save the beleaguered coal and nuclear industries. The sector has struggled after years of mounting environmental regulations and stiff competition from cheap and efficient natural gas. Plants have shuttered across the country, with FirstEnergy notably asking the White House to use its powers to bail out its soon-to-close plants in Ohio and Pennsylvania. During the 2016 election, then-candidate Trump pledged to reboot America’s coal communities.
The Trump administration argues that nationwide closure of nuclear and coal facilities constitutes an emergency because they can store fuel onsite, unlike natural gas or renewables. The risk — according to the White House — is a continuation of closures that could pose a reliability risk to the grid.
However, not everyone is happy with the move.
“Any federal intervention in the market to order customers to buy electricity from specific power plants would be damaging to the markets and therefore costly to consumers,” read a Friday tweet from PJM Interconnection, the largest grid operator in the U.S. “There is no need for any such drastic action.” (RELATED: A Plan To Save Struggling Coal Plants Is Circulating Around The White House)
A large source of criticism has come from coal and nuclear’s biggest competitors: natural gas and renewables.
“The Trump administration would have customers shoulder billions of dollars in costs to support a withering industry that has failed to remain competitive with the abundance of new natural gas, cheap renewable resources, flat demand growth, and growing energy efficiency,” Robbie Orvis, policy director for Energy Innovation, said in a Friday statement to Greentech Media. “What’s being discussed here is disgraceful and threatens to undermine the very foundation of competitive electricity markets.”
Energy Innovation is an environmental policy firm that works to promote renewable energy technology. Orvis, among many other green energy proponents, stands firmly opposed to the White House’s plan.
Renewables, however, have profited from their fair share of government intervention over the years. State legislatures across the country have implemented net metering programs that benefit the solar industry, but burdens non-solar customers with higher electricity fees. The California Energy Commission recently passed an historic mandate that requires all new homes in the state to own a solar panel, adding costs to an already expensive real estate market. Coal facilities, for their part, dealt with a growing number of environmental regulations before the entrance of current White House administration.
An incongruous coalition of gas and renewable groups urged the Department of Energy on May 8 to reject an emergency plan to rescue uneconomical coal and nuclear plants.
“[A]s broad as it is, the Defense Production Act is not broad enough to do what the supporters of these uneconomic power plants would like,” the letter reads. “The Defense Production does not allow the government to set prices. Nor does it allow the government to force market participants to buy products or services they do not wish to buy.”
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