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Report: Trump to make grid operators buy power from at-risk coal, nuclear plants

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Report: Trump to make grid operators buy power from at-risk coal, nuclear plants

The Trump administration is making plans to require U.S. grid operators to buy power from financially struggling coal-fired and nuclear plants that are at risk of closure, according to a May 31 story from Bloomberg.

The plan, which Bloomberg said was circulated before a June 1 meeting of the White House's National Security Council, would involve using two federal laws to save vulnerable plants. One is a national security law known as the Defense Production Act, which is aimed at securing critical resources needed for the national defense. The second is Section 202 of the Federal Power Act, a statute that allows the secretary of energy to order the provision of resources to address emergency shortfalls or demand spikes in energy.

Bloomberg also reported the U.S. Department of Energy is making plans to create a "strategic electric generation reserve" aimed at promoting the national defense and "maximizing domestic energy supplies."

The draft memo was dated May 29, but President Donald Trump has not indicated if or when he may sign the document. The White House and DOE did not respond to emails on the memo.

If the administration follows through on the plan, the move would cap a push by the coal and nuclear industries for some type of support to address what they say are unfair market rules that are forcing the premature retirement of coal-fired and nuclear generation.

Merchant generator FirstEnergy Solutions Corp. asked the DOE in late March to ensure full cost recovery for economically struggling coal-fired and nuclear power plants in the PJM Interconnection. The request, which the company made under Section 202(c) of the Federal Power Act, would require the PJM to purchase power and other services from the company's at-risk coal and nuclear plants in the region. The company also asked that other coal-fueled and nuclear facilities in PJM be eligible for such contracts if they have enough fuel on-site to operate at full output for 25 days.

And in September 2017, Energy Secretary Rick Perry sought market relief for coal and nuclear plants from the Federal Energy Regulatory Commission. FERC rejected Perry's request in January, saying the DOE did not show that current market tariffs were unjust or unreasonable or that coal and nuclear closures threatened the viability of the U.S. bulk power system.

Critics of the DOE and FirstEnergy requests, including natural gas and renewable energy industry groups, say the proposals would distort and undermine competitive power markets and disadvantage cleaner sources of electricity without improving grid reliability or resilience.