Trump proposes support for coal and nuclear

4 June 2018

US President Donald Trump on 1 June directed Energy Secretary Rick Perry to take "immediate steps" to support coal-fired and nuclear power plants to keep them open, saying it was a matter of national and economic security.

Trump believes that keeping America's energy grid secure "protects national security, public safety and economy from intentional attacks and natural disasters”, according to a statement by White House press secretary Sarah Huckabee Sanders. She added that impending retirements of coal-fired plants and NPPs are harming the electricity grid and reducing its resilience, and that the president wants immediate action "to stop the loss of these resources”.

Bloomberg reported on 31 May that a 41-page draft memo by the Trump administration dated 29 May was before the National Security Council urging federal action to force grid operators to buy power from uneconomic coal and nuclear plants. The memo, headed “Privileged & Confidential, Attorney-Client Privilege”, outlines plans for a Department of Energy (DOE) directive under Section 202(c) of the Federal Power Act (FPA) to “direct the operators to purchase electricity or electric generation capacity from at-risk facilities”.

It notes that premature retirements of fuel-secure baseload plants reduce resilience to fuel supply disruptions, adding that federal and state regulatory bodies, as well as the private sector, must act promptly “to achieve a lasting solution that meets the needs of both national security and the efficient operation of energy markets”.

DOE has begun a two-year analysis, working with five national laboratories to identify critical defence facilities served by “Defense Critical Electric Infrastructure”. In the meantime, DOE will issue an order (or directive), effective for two years, with authority under the Defense Production Act and FPA. It will act as a “temporary stop-gap measure to prevent the further permanent loss of the fuel-secure electric generation capacity for the grid upon which our national security depends, much like the interstate highway system”.

It will direct system operators “to purchase or arrange the purchase of electric energy or electric generation capacity from a designated list of subject generation facilities (SGFs) sufficient to forestall any further actions toward retirement, decommissioning, or deactivation of such facilities during the pendency of DOE’s order”.

According to the memo, the order will also establish a strategic electric generation reserve to promote national defence and maximise domestic energy supplies. “This prudent stop-gap measure will allow the Department further to address the Nation’s grid security challenges while the Order remains in force.”

Bloomberg said the memo makes a case for action, arguing that a lapse in reliability would affect national security, and federal intervention is necessary. Under the plan, DOE would reportedly direct grid operators to buy power from designated facilities for two years “to forestall any future actions toward retirement, decommissioning or deactivation”. The planned action will serve as a “prudent stop-gap measure” while the DOE addresses the nation’s “grid security challenges” during its two-year-long study.

The independent Federal Energy Regulatory Commission rejected a similar request by Perry in January, saying in a unanimous decision that there's no evidence that past or planned retirements of coal-fired power plants pose a threat to grid reliability.

Opposition has been voiced by various energy industry groups, including oil, natural gas, solar and wind power, saying the proposal would increase energy prices and distort markets. Todd Snitchler of the American Petroleum Institute said: "Unprecedented government intervention in the energy markets to support high-cost generation will hurt customers by taking more money out of their pockets."
"Orderly power plant retirements do not constitute an emergency for our electric grid," said Amy Farrell, vice president of the American Wind Energy Association. She said the plan was "a misapplication of emergency powers" and that there was “certainly no credible justification to force American taxpayers to bailout uneconomic power plants”.

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