Trump Administration Considers Forcing Taxpayers to Bail Out Coal and Nuclear Executives

WASHINGTON, D.C. - Bloomberg reported late yesterday 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.

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 to force American families and businesses to bail out uneconomic coal and nuclear plants. The Defense Production Act 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 extreme circumstances, such as an act of war or severe grid impairment, where potential shortages of energy are imminent. 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 actions today are not just unnecessary, they are 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) to use 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, expensive, and inflexible, as they are being rapidly replaced with cleaner sources. Trump’s order would flout public opinion, the market, and, likely, the law.

In response, Mary Anne Hitt, Director of Sierra Club’s Beyond Coal campaign, released the following statement:   

“This is an outrageous ploy to force American taxpayers to bail out coal and nuclear executives who have made bad decisions by investing in dirty and dangerous energy resources, and it will be soundly defeated both in the courts and in the court of public opinion. Trump will clearly try anything to help millionaire coal and nuclear executives, even demanding American families fork over big bucks to prop up their uneconomic, failing power plants. Just like all his other ploys and ham-handed tactics, this one will fail because it is out of touch with reality and out of step with the law.

“Every grid operator has unequivocally stated that there is no grid emergency, yet Donald Trump is trying to invent one to help his rich friends. The Defense Production Act and Section 202(c) of the Federal Power Act are meant for actual emergencies, and the court of law will make that clear in the weeks and months to come should Trump try this plan. The bottom line is that no matter what Trump does, coal and nuclear plants will continue to retire during his administration and beyond. The taxpayers should never be asked to bail out wealthy fossil fuel executives who are trying to pollute our air and water with their dirty, dangerous fuels and bad decisions, and this effort to push these illegal directives will be met with fierce resistance in the courts and in the streets.”