At the direction of President Donald Trump, Energy Secretary Rick Perry is taking immediate steps to prevent the closure of coal and nuclear plants across the nation, the White House announced Friday.
What kind of intervention is required?
A leaked internal memo suggests the move would involve “drastic government intervention in America’s energy markets,” the New York Times reported.
Possible proposals include having the Department of Energy have grid operators buy electricity from struggling coal and nuclear plants for two years. Normally, that authority is used in natural disasters or other crises.
But some energy companies, environmentalists and consumer groups are balking at that idea, according to the Times. Oil and gas trade groups, along with wind and solar organizations, condemned the plan and said it would mean higher electric bills for consumers.
In a statement, White House press secretary Sarah Huckabee Sanders said the ongoing closure of coal and nuclear plants is “leading to a rapid depletion of a critical part of our nation’s energy mix, and impacting the resilience of our power grid.”
Grid operators have disagreed.
PJM Interconnection, for example, runs the Mid-Atlantic electric grid that serves 65 million people, the Times reported. The company issued a statement that its grid is reliable and federal intervention “would be damaging to the markets and therefore costly to consumers” by raising electricity prices.
Trump campaigned on the promise that he would revive the coal industry. Twenty-five coal plants have closed since he took office, as they face competition from natural gas, wind and solar power, the Times reported.
How much might this cost?
Depending on the approach taken by the Trump administration, propping up coal and nuclear plants could cost the taxpayers anywhere from $311 million to $11.8 billion per year. That estimate was provided by Robbie Orvis, director of energy policy design at Energy Innovation, according to the Times.
Perry in September asked the Federal Energy Regulatory Commission to consider “guaranteeing financial returns” for power plants able to “stockpile” 90 days worth of fuel on site. Perry argued that losing the plants could threaten the nation’s power grid.
By January, the commission had rejected Perry’s request, the Times reported. Since then, the Trump administration has been studying other options.