The DPA, enacted in 1950 during the Korean War to ensure the availability of critical materials and resources for the United States national defense, allows the secretary of energy, through a presidential delegation, to require contracts or allocations of materials and services to maximize domestic energy supplies.
The US energy watchdog found the proposals neither justified nor reasonable But on Friday, the White House said it was working on a new plan.
The draft memo laying out the directive would not give a certain quantity operators must spend however says it will likely be sufficient to maintain the services open for the following two years, saying that US nationwide safety "depends on a strong USA home industrial base, of which the coal, nuclear, and oil and pure fuel industries are vital strategic parts".
Coal and nuclear plants are in trouble because across much of the country they're having trouble competing with cheaper forms of electricity generated by natural gas and renewable energy.
Manchin said Friday he is glad Trump is considering his idea to support coal-fired and nuclear plants under the Defense Production Act.
The Energy Department would be relying partly on the Federal Power Act - the so-called Section 202 authority - that lets the administration order guaranteed profits for power plants that can store large amounts of fuel on site.
The Department of Energy proposal would require grid operators to purchase electricity from a designated list of coal and nuclear plants over the course of two years. 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. "There is no need for any such drastic action", said a PJM spokesperson about the new idea.
The move has been under consideration for months, with pro-coal politicians like Sen. Abusing this authority to bail out uneconomic power plants for such an extended time makes no sense, especially when most regions of the country are awash with excess electricity.
The Energy Department action, if ordered, would represent an unprecedented intervention into USA energy markets.
The head of the Electric Power Supply Association (EPSA), a national trade association representing independent power producers and marketers, calls the memo an "unprecedented executive branch intervention" and fears that the "economic consequences [would be] profound for power suppliers and consumers". Fortunately, the last bailout attempt was rejected unanimously by federal regulators, comprised mostly of Trump appointees.
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.
The Sierra Club explains that FirstEnergy Solutions, which recently filed for bankruptcy, had asked the 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 group says.