President Donald Trump's effort to stop the retirement of coal-fired power plants is reminiscent of a 2017 attempt that faltered in the face of widespread industry opposition.
Trump, in an executive order signed on Tuesday, directed the US Department of Energy (DOE) to tap into emergency powers to stop the retirement of coal-fired plants and other large plants it believes are critical to grid reliability. The order sets a 30-day deadline for DOE to decide which plants are critical based on a new methodology that will analyze if reserve margins, or the percent of unused capacity at peak demand, are at an "acceptable" level.
The initiative shares similarities to Trump's unsuccessful effort in his first term to bail out coal and nuclear plants. In the 2017 effort, Trump backed a "grid resiliency" proposal to compensate power plants with 90 days of on-site fuel. But an unusual coalition of natural gas industry groups, manufacturers, renewable producers and environmentalists united against the idea, warning it would upend power markets and cost consumers billions of dollars each year. The US Federal Energy Regulatory Commission voted 5-0 to reject the proposal.
It remains unclear if a similarly sized coalition will emerge to fight Trump's latest proposal, under which DOE would use emergency powers in section 202(c) of the Federal Power Act to keep some coal plants and other large power plants operating. Industry groups have largely been avoiding taking positions that could be seen as critical of Trump.
Environmentalists say they strongly oppose keeping coal plants operating using emergency powers. Doing so would mean more air pollution and greenhouse gas emissions, they say, and higher costs for consumers. Environmental groups say they are hoping other industries affected by the potential bailout will eventually speak out against the initiative.
"The silence from those who know better is deafening," Center for Biological Diversity climate law institute legal director Jason Rylander said. "I hope that we will start to see more resistance to these dangerous policies before significant damage is done."
DOE said it was "already hard at work" to implement Trump's executive order, which was paired with other orders that were meant to support coal mining and coal production. US energy secretary Chris Wright said today that reviving coal will increase the reliability of the electrical grid and bring down electricity costs, but he has not shared further details on the 202(c) initiative.
Trying to litigate the program could be "tricky", and section 202(c) orders have never successfully been challenged in court, in part because they are usually short-term orders, Harvard Law School Electricity Law Initiative director Ari Peskoe said. But opponents could challenge them by focusing on "numerous legal problems", he said, such as not allowing public comment or running afoul of a US Supreme Court precedent that prohibits agencies from attempting to decide "major questions" without clear congressional authorization.
"Here DOE would use a little-used statute explicitly written for short-term emergencies in order to PREVENT a change in the US energy mix," Peskoe said.
A projected 8.1GW of coal-fired generation is set to retire this year, equivalent to nearly 5pc of the coal fleet, the US Energy Information Administration said last month. Electric utilities often decide which plants to retire years in advance, allowing them to defer maintenance and to forgo capital investments in aging facilities. Keeping coal plants running could require exemptions from environmental rules or pricey capital investments, the costs of which would likely be distributed among other ratepayers.
