DOE Prepares Bailout for Unprofitable Power Plants
The Federal Energy Regulatory Commission (FERC) has said that the country has ample power to supply market needs. FERC intervened and stopped an attempt by the Department of Energy (DOE) to pick winners and losers in the energy market when it unanimously rejected DOE’s proposal to bailout nuclear and coal.
Now DOE is attempting to meddle in the energy marketplace yet again. DOE has made the unfounded claim that closing both coal and nuclear power plants threatens national security. A 40-page memo from the Trump administration to the National Security Council has laid out a strategy on how to reinforce this claim.
The memo asserts that U.S. military instillations are 99 percent dependent on the commercial power grid, and therefore reliability of the electric system is vitally important to national defense. It argues (without evidence) that the decommissioning of power plants must be overseen by the federal government to ensure the U.S. doesn’t reach a tipping point in the loss of vital and secure energy resources.
The memo lays out a plan where DOE would direct the purchase of power from a designated list of facilities over the next two years “to forestall any future action toward retirement, decommissioning or deactivation.”
In a 2015 piece of highway legislation known as the FAST Act, Congress directed the DOE to identify critical energy infrastructure which the agency is currently performing; however, the process is scheduled to take two years. Hence the memo suggests that DOE use the Federal Power Act and the Defense Protection Act from 1950 to require the plants to keep operating.
This is the most recent attempt by the administration to force power companies to keep operating insolvent and unprofitable plants that are losing money due to the rise of cheaper energy sources like natural gas. And despite the administration’s claims, it is completely unnecessary.
“Any federal intervention in the market to order customers to buy electricity from specific power plants would be damaging to the markets and therefore costly to consumers,” said the PJM Interconnection in a statement, which operates the nation’s largest power grid and stretches from the Midwest to the Atlantic Coast. “There is no need for any such drastic action.”