Trump Administration Mulls Coal, Nuclear Bailouts; Energy Groups React

Donald Trump wears a coal miners hat while addressing his supporters during a rally at the Charleston Civic Center

The proposal argues for action, stating that the decommissioning of coal-fired power plants must be managed, citing national security reasons. The federal government has a lot of assets in the Pacific Northwest.

The draft memo asserts that "federal action is necessary to stop the further premature retirements of fuel-secure generation capacity" while DOE and other entities embark on further study of "national security needs and additional measures to safeguard the nation's electric grid and natural gas pipeline infrastructure from current threats".

The DPA, enacted in 1950 during the Korean War to ensure the availability of critical materials and resources for the USA national defense, allows the secretary of energy, through a presidential delegation, to require contracts or allocations of materials and services to maximize domestic energy supplies.

In late March, FirstEnergy's (FE.N) FirstEnergy Solutions [FE.UL] unit - which runs coal and nuclear power units - called on the USA energy secretary to use the emergency powers to lift the sectors.

"Too many of these fuel-secure plants have retired prematurely and many more have recently announced retirement", only to be replaced by less-secure, less-resilient natural gas and renewable power sources, the memo said.

Countering global efforts to stem the rise of global warming and increase the use of sustainable energies, Trump and his advisors are dusting off a 20th-century national security act in another attempt to bolster flagging coal and nuclear power generating industries in the US.

The drilling industry, renewable energy companies, and many grid operators reject the idea that coal and nuclear power plant closures are undermining USA electricity reliability and resiliency, saying gas, solar and wind have proven dependable. Based on a leaked memo it appears Perry will deploy a pair of archaic, World War II- and Cold War-era laws to shelter certain plants from competition in the free market, likely mandating regional utilities to ensure that selected uneconomic coal and nuclear plants continue to operate. Energy experts across a range of industries, within the federal government and in academia have agreed that this sort of effort will create a bloated power sector deploying outmoded technologies.

The Energy Department action, if ordered, would represent an unprecedented intervention into US energy markets. In the case of coal specifically, the National Energy Technology Lab stated that, during the 2018 Bomb Cyclone at the height of peak demand on January 5, 2018, "had coal been removed, a 9-18 GW shortfall would have developed".

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. The company issued a statement that its grid is reliable and federal intervention "would be damaging to the markets and therefore costly to consumers" by raising electricity prices.

"There is no need for any such drastic action", the company said. A FirstEnergy Corp. subsidiary requested immediate intervention from Perry's agency in late March.

The American Council on Renewable Vitality, a nonprofit that represents numerous teams that wish to emphasize renewable power sources, stated in an announcement that the administration is intervening to bail out coal and nuclear energy vegetation "which are now not aggressive on their very own".

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