Sierra Club Statement on Trump Administration’s Latest Attempt to Bail Out Money-Losing Coal and Nuclear Plants

Columbus, OH - Today, Bloomberg reports that the Trump Administration is considering an order that would force grid operators across the country to buy electricity from failing coal and nuclear plants -- a move Bloomberg categorizes as “unprecedented intervention” into U.S. energy markets and an order that would raise electricity rates for Americans across the country. Such a plan comes despite fierce objections by grid operators, consumer advocates, and business interests that such an unnecessary bail out would be expensive and destructive.

“Trump clearly wants to try anything to help his millionaire coal and nuclear executive buddies, even demanding American families fork over big bucks to prop up their uneconomic, failing power plants,” said Neil Waggoner, Campaign Representative with the Beyond Coal Campaign in Ohio. “Trump and Sec. Perry should listen to energy experts, and allow the market to retire uneconomic energy production.”

Bloomberg indicates a draft Energy Department plan would exploit Section 202(c) of the Federal Power Act and the Cold War-era Defense Production Act (DPA) to force American families and businesses to bail out uneconomic coal and nuclear plants. The DPA is an obscure wartime law that allows the president to secure scarce resources for national defense. Under the Federal Power Act, Section 202(c) allows the Energy Secretary to issue an “emergency run order” for use in only the most extreme circumstances, such as an act of war or severe grid impairment. However, since grid operators, industry experts, and utilities have repeatedly and forcefully stated that there is no energy shortage and there is no evidence of an emergency, Trump’s scheme today is not just unnecessary, it is likely illegal.

Meanwhile, the Federal Energy Regulatory Commission confirmed earlier this year that any threats to the grid posed by extreme weather events --  events exacerbated by climate change, to which coal-fired power plants are a major contributor -- provide no basis to subsidize non-competitive coal and nuclear plants.  Additionally, senior staff at DOE have previously told the press that the department, “would never use a 202 to stave off an economic issue...that's not what it's for."

FirstEnergy Solutions, which recently filed for bankruptcy, asked the Department of Energy (DOE) for its emergency powers to bail-out plants whose high costs have rendered them obsolete in an energy market in which modern clean energy resources like solar, wind, and energy efficiency are more affordable. The coal and nuclear plants that have announced their retirement have been rejected by utilities, consumers, and the market for being too dirty and too expensive, as they are being rapidly replaced with cleaner sources, meaning Trump’s order would flout public opinion, the market, and, likely, the law.