Trump bailout plan for power plants is AWOL on national security

In my eight years as secretary of the Navy, I worked every day to ensure that our men and women in uniform had everything they needed to prepare for and complete the critical missions they are charged to carry out. So I am acutely aware of the importance of energy resilience and grid security to that objective.

Aggressive investments are critical to ensure that every military installation has secure access to reliable energy. Every homeowner and business owner knows the havoc that power failures cause, so it’s easy to understand their impact on our military’s ability to execute their mission. That is why I made it a top priority to improve energy resilience on military bases when I led the department.

But rather than advancing that objective, President Donald Trump appears poised to spend tens of billions of dollars on a corporate bailout that would do nothing to improve grid resilience. Worse, his proposal would represent an unprecedented federal intervention into power markets, masking blatantly political objectives with a dangerous and unwarranted use of national security authorities.

Virtually all power outages — including those at military bases — result from problems in transmission and distribution systems or, in the case of the military, on-base energy infrastructure. Ignoring that real problem, the president’s proposal would instead bail out a select number of power plants while doing nothing to harden power lines and other infrastructure that delivers electricity to homes, businesses and military bases.

Equally suspect is the Trump administration’s claim that the coal and nuclear plants it seeks to subsidize would promote energy resilience because they have fuel supplies on site. A recent study revealed that fuel shortages were responsible for less than one-in-a-million hours of electricity outages.

But in addressing a nearly nonexistent problem, the White House would spend a very real amount of money. One study found that the small number of companies that would be bailed out would reap a collective windfall in excess of $34 billion over two years. That money would either come from America’s rate payers — showing up on the monthly bills of millions of households and businesses — or from a Pentagon budget that the military needs for the real business of national security. Nevertheless, Trump already ordered Energy Secretary Rick Perry to “prepare immediate steps” to stop these unprofitable coal and nuclear plants from shuttering.

The administration has already tried to make its argument and failed. Trump’s own Department of Energy asked the Federal Energy Regulatory Commission to implement new rules that would have shielded the plants at issue from the competitive market. FERC stopped the administration cold, pointing out that the plan would do essentially nothing to improve resilience. As FERC Commissioner Robert Powelson recently said, “This intervention could potentially ‘blow up’ the markets and result in significant rate increases without any corresponding reliability, resilience, or cybersecurity benefits.”

The president is now reportedly considering another option that would actually do even more harm. One law he apparently plans to invoke is the Defense Production Act, a Korean War-era statute that gives the president broad power to intervene in the economy to ensure the availability of strategically important industries and resources. Invoking DPA authority to spend tens of billions of dollars prop up failing companies without a valid strategic reason would set a dangerous precedent, potentially undermining support for the future use of that authority in a real emergency.

There are legitimate ways to make our military bases more energy resilient and to fix what is truly broken. Rather than propping up old power plants, let’s invest in new technologies like distributed generation, battery storage and microgrids. Those will help keep the lights on and the mission up and running at our bases, even if the grid goes down. That was the Navy’s focus when I was in the job and the military services are continuing that work. The administration would be wise to follow their lead.

But the president apparently has his own plan, which involves spending billions of dollars on a political objective, while ignoring the real problem. Even worse, his plan will force American families and businesses to foot the bill, or divert money from supporting our troops, to line the pockets of a select group of power companies and their shareholders. The Trump bailout plan is bad for citizens, bad for the military, and bad for national security. Americans should reject it.