President Donald Trump ordered Energy Secretary Rick Perry to take immediate action to stem power plant closures in the name of national security, arguing that a decline in coal and nuclear electricity is putting the nation's grid at risk.
Trump campaigned on the promise that he would revive the coal industry.
Bloomberg News obtained a Department of Energy memo that orders grid operators to buy electricity from coal and nuclear plants that are at risk of closure - because of cheaper energy available from renewable sources and natural gas.
In keeping with this request, last September, Perry called on the Federal Energy Regulatory Commission (FERC) to fast-track a multi-billion dollar proposed "grid resiliency" rule that would have required utility customers to buy above-market rate electricity from otherwise uncompetitive coal and nuclear plants for the stated goal of preserving grid reliability - despite his own agency's finding that preventing these retirements wouldn't really do much for the grid.
According to the draft memo, the Energy Department would exercise its emergency authority to order grid operators to give preference to plants "that have a secure on-site fuel supply" and which "are essential to support the Nation's defense facilities, critical energy infrastructure, and other critical infrastructure".
NGSA President and CEO Dena Wiggins said "this misguided attempt to artificially resuscitate a specific set of aging and uneconomic power plants will do far more harm than good", including raising costs and undermining competitive power markets. One independent group that manages the electricity grid that serves more than 65 million people said that it could be bad for consumers if the federal government intervenes in the market. Since 2011, he has covered energy and environment for the Allegheny Front, a public radio environmental news show in Western Pennsylvania.
The Energy Department action, if ordered, would represent an unprecedented intervention into US energy markets. Instead, it says that the loss of both coal and nuclear plants could threaten national security, given that Department of Defense installations are 99 percent dependent on the grid.
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.
According to another energy association, Advanced Energy Economy (AEE), the plan is "an exercise in crony capitalism taken exclusively for the benefit of a bankrupt power plant owner and its coal supplier", says Malcolm Woolf, AEE's senior vice president of policy.
Some coal and power companies have lobbied the administration to invoke the measure, known as a 202 (c), and Trump has picked up on the term, telling coal miners on a recent trip to West Virginia that "we'll be looking at that 202".
Also supporting the Trump administration's decision was Sen.
A major grid operator, PJM Interconnection, said in a statement that the power system is more reliable than ever and federal intervention isn't needed.
The leaked memo circulating within the White House does not mention climate change. According to Bloomberg, the memo added that these coal and nuclear plants are being replaced by natural gas and renewable power generation that is not secure or resilient. Critics also suggested Trump has political motivations for propping up outmoded technologies, because coal company executives have been among his big financial backers.