Trump said readying lifeline for loss-making coal plants
TRUMP administration officials are making plans to order grid operators to buy electricity from struggling coal and nuclear plants in an effort to extend their life, a move that could represent an unprecedented intervention into US energy markets.
The Energy Department would exercise emergency authority under a pair of federal laws to direct the operators to purchase electricity or electric generation capacity from at-risk facilities, according to a memo obtained by Bloomberg News. The agency also is making plans to establish a “Strategic Electric Generation Reserve” with the aim of promoting the national defence and maximising domestic energy supplies.
“Federal action is necessary to stop the further premature retirements of fuel- secure generation capacity,” says a 41-page draft memo circulated before a National Security Council meeting.
The plan cuts to the heart of a debate over the reliability and resiliency of a rapidly evolving US electricity grid. Nuclear and coal-fi red power plants are struggling to compete against cheap natural gas and renewable electricity. As nuclear and coal plants are decommissioned, regulators have been grappling with how to ensure that the nation’s power system can withstand extreme weather events and cyber-attacks.
“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.
Over dozens of pages, the memo makes the case for action, arguing that the decommissioning of power plants must be managed for national security reasons and that federal intervention is necessary before the US reaches a tipping point in the loss of essential, secure electric generation resources. Defence Department installations are 99 per cent dependent on the commercial power grid, one reason that electric system reliability is vitally important
It’s going to be tough to get a court to question DOE’s factual finding -- particularly if it relates to national defence. Ari Peskoe, director of the Electricity Law Initiative
to US defence and homeland security, the memo asserts.
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.
Opponents of the new plan contend bailouts are a solution in search of a problem. They argue there are many ways to back up the grid that won’t cost ratepayers billions of dollars. A coalition of natural gas and renewable power advocates told Perry that “power plant retirements are a normal, healthy feature of electricity markets,” and therefore there is no emergency that would justify Energy Department action.
Invoking national security concerns could bolster the Trump administration’s case in any legal challenges over the intervention, said Ari Peskoe, director of the Electricity Law Initiative at Harvard University.
“It’s going to be tough to get a court to question DOE’s factual fi nding -- particularly if it relates to national defence,” Peskoe said in an interview. — Bloomberg