While the White House ignores the plight of Puerto Rico Americans still stranded without critical infrastructure--like roofs and electricity--from last year’s Hurricane Maria, the President instead has drafted a Directive to U.S. Energy Secretary Rick Perry to order a sweeping financial bailout of America’s bankrupt nuclear power and coal industry under federal emergency authority meant for use in times of natural disaster and war. Trump says his unprecedented federal intervention into U.S. electricity markets is a matter of “national security.” Critics, including State Attorneys General, environmental, consumer protection and free-market conservative groups alike, argue that the proposed Presidential Directive is an intrusion and politically motivated attack that threatens a dangerous upheaval of the nation’s competitive energy market.
The 41-page White House draft memo leaked to Bloomberg News, if enacted, orders electric grid operators to buy and sell significantly above-market-priced electricity from economically failing nuclear and coal-fired generators like Ohio-based FirstEnergy Solutions, one of the nation’s largest electric utilities, which has filed for bankruptcy. FirstEnergy Solutions includes FirstEnergy Nuclear Corporation (FENOC) which is struggling with the uneconomical Davis-Besse, Perry and Beaver Valley Units 1 and 2 nuclear power stations. All of these nuclear stations have announced permanent closure within the next four years without significant financial relief. As much as 60% of the nation’s remaining 99 nuclear power stations are no longer economically competitive to operate against natural gas and the accelerating deployment of renewable energy for the sun and wind.
The Energy Department order would guarantee profits to the nuclear and coal industries for at least the next two years by enacting emergency authority under the Federal Power Act Section 202(c) claiming that these power generators provide for an electric grid system “resilient” to disaster---such as the ability to stockpile large amounts of fuel onsite. The Directive also enacts the Cold War-era Defense Production Act that allows the president to nationalize private industry during a national crisis. The move, on acted on, will likely trigger immediate legal action. Ten State Attorneys General have opposed “sudden” action as originally proposed by First Energy because the loss of the failing industries profits does not constitute an emergency. In fact, the Attorney Generals warn the move will “undermine competitive regional power markets, burden customers with excess costs and undercut state energy laws and policies, and exacerbate pollution and public health harms."
The Pennsylvania-based electric grid operator (PJM) servicing 13 states has also determined that the President’s drastic action is uncalled for. “‘Our analysis of the recently announced planned deactivations of certain nuclear plants has determined that there is no immediate threat to system reliability. Markets have helped to establish a reliable grid with historically low prices,’ the grid operator said. ‘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.’” Jon Wellinghoff, a former chair of the Federal Energy Regulatory Commission (FERC) is quoted, “‘I can’t tell you precisely how much,’ he said, ‘but if you go from a market system to a non-market system, your rates are going to go up.’”
Questions remain how the proposed mandate might be implemented or how many electric generators get bailed out. But there is no question that the non-existent resilience argument as the bases for bailing out nukes is bogus. Every nuclear power station in the country automatically shuts down production with a perturbation of the electric grid which supplies 100% of power to vital reactor safety systems at operation. Nuclear power plants can’t restart themselves to restore the grid but require grid stability to power back up. Nuclear power stations are not reliable in climate change and must power down, even shut down, if rivers supplying cooling water to the reactors become too warm from a heat wave in the weather or too low from drought.
Trump’s meddling with electricity markets adds to his 30% tariff already imposed on imported photovoltaic solar panels that constricts competitive pricing from renewable electrical power from the sun.