February 9, 2018 Read More →

Trump Administration Said to Be Planning a Regulatory End Run to Bail Out Failing Coal Plants

Bloomberg News:

After failing to win a bailout for cash-strapped coal plants, some Trump administration officials are considering emergency orders that could keep at least some coal generators online, people familiar with the discussions said.

The approach would require Rick Perry to use his authority as U.S. energy secretary to spur emergency compensation for coal plants run by FirstEnergy Solutions that may be at risk of shutting, said the people, asking not to be identified because the information isn’t public. Some Energy Department officials are weighing this option after federal regulators rejected a proposal by Perry last month to pay coal plants more for their “resilience,” they said. FirstEnergy hasn’t formally requested the aid, one of the people said.

The FirstEnergy Solutions plants in question were at the heart of the Trump administration’s plan to compensate nuclear and coal generators more for their power. The proposal was rejected last month by members of the Federal Energy Regulatory Commission that Trump appointed who said it would violate U.S. law.

Coal mogul Bob Murray, an outspoken advocate for the bailout plan and a Trump supporter, had previously called on Perry to use his emergency authority to save the FirstEnergy Solutions plants but was shot down. He’s warned that his company, which supplies some of the units, may face default if they shut.

Perry has the authority under Section 202 of the Federal Power Act to order a power plant online should he determine it’s needed in an emergency to “serve the public interest.” Regulators may then prescribe a reasonable compensation to keep the plant in service. While some officials are weighing the merits of a 202 order, the Energy Department may still decide to pursue other options — or none at all. It wasn’t immediately clear which FirstEnergy plants could benefit from the action.

In an interview Thursday, Energy Undersecretary Mark Menezes said the agency still expects the Federal Energy Regulatory Commission to come up with an alternative to Perry’s rejected plan. But he emphasized that the Energy Department is prepared to act alone if it doesn’t.

More: Trump Administration Is Weighing Emergency Aid for Some Coal Plants

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