Trump administration moves to keep failing coal and nuclear plants open, citing national security

Justin Solomon | CNBC

The Trump administration is preparing to keep ailing coal and nuclear plants online, potentially by turning to rarely-used federal powers and justifying the move by arguing that the facilities are critical to national security.

President Donald Trump on Friday ordered Energy Secretary Rick Perry to "prepare immediate steps" to prevent any more of the plants from closing.

"Unfortunately, impending retirements of fuel-secure power facilities are leading to a rapid depletion of a critical part of our nation's energy mix, and impacting the resilience of our power grid," the White House said in a statement.

If the administration follows a leaked draft proposal from the Energy Department, that would mean the administration will force electric grid operators to buy power from plants that have become uncompetitive and are at risk of closing. It was not immediately clear whether the White House would take that path.

The plan drew criticism from a broad spectrum of stakeholders, including the organizations that operate the nation's grids and competitive power markets, energy industry groups and environmentalists.

"The Administration's draft plan to provide government assistance to those coal and nuclear power plants that are struggling to be profitable under the guise of national security would be unprecedented and misguided" -Todd Snitchler, American Petroleum Institute market development group director for the

The unprecedented move essentially amounts to a second attempt to bail out coal and nuclear power plants. Secretary of Energy Rick Perry proposed a rule last year that would require regional markets to compensate coal and nuclear plants for the reliability they provide to the grid. However, a bipartisan group of five regulators unanimously rejected that plan.

The White House memo, made public on Friday, shows the Trump administration is now turning to a familiar strategy: pushing through a policy on the basis of national security. The White House has also invoked that argument to justify slapping tariffs on foreign steel and aluminum and proposing duties on imported automobiles, including against key allies Canada, Mexico and Europe.

"To promote the national defense and maximize domestic energy supplies, federal action is necessary to stop the further premature retirements of fuel-secure generation capacity," the report says.

Coal and nuclear power plants are retiring ahead of schedule, primarily due to competition from natural gas-fired facilities and renewable solar and wind farms.

View Related Chart

Click to show more