President Donald Trump ordered his Energy Secretary Rick Perry to take immediate action to stem power plant closures, arguing that a decline in coal and nuclear electricity is putting the nation’s security at risk. 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. The Center supports President Trump's order and we look forward to promoting Energy Secretary Rick Perry's recommendations.
Under the Energy Department’s draft plan, the administration would take action under two laws: the Federal Power Act that allows the government to guarantee profits for power plants amid grid emergencies, and the 68-year-old Defense Production Act, a Cold War-era statute once invoked by President Harry Truman to help the steel industry.
For two years, the Energy Department would direct the purchase of power or electric generation capacity from a designated list of facilities “to forestall any future actions toward retirement, decommissioning or deactivation,” according to the memo. The proposed Energy Department directive also would tell some of those facilities to continue generating and delivering electric power according to their existing or recent contracts with utilities.
It’s not clear that the Federal Energy Regulatory Commission would go along with the plan. Although the administration could aim to bypass the electric regulators completely, FERC could play a role in any effort to require grid operators to make out-of-market payments to electric generators.
Trump’s directive comes as administration officials search for ways to extend the life of money-losing coal and nuclear power plants that face competition from cheaper natural gas and renewable energy. The plants are considered “fuel-secure” because they house coal and nuclear material on site and are not dependent on pipelines that can be disrupted, wind that stops blowing or a sun that sets.
The department’s strategy, outlined in a memo that would use authority granted under a pair of federal laws to establish a “strategic electric generation reserve” and compel grid operators to buy electricity from at-risk plants. The steps are necessary to protect national security.
The move comes as Trump uses similar national security arguments to justify market interventions aimed at protecting other treasured political constituencies -- steelworkers and automakers -- at the expense of U.S. allies.
A FirstEnergy Corp. subsidiary requested immediate intervention from Perry’s agency in late March, after the Ohio-based company announced it would shut three nuclear power plants feeding the nation’s largest grid, operated by PJM Interconnection LLC.