Donald Trump doesn’t know where to find the money for his infrastructure program. He doesn’t have a clue about how to fund his budget. But he has a very good idea of where to get the dollars to save his friend, the coal baron.
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.
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To make this work, Trump would have Rick Perry dip into Section 202 of the Federal Power Act. It would seem to be a fairly restricted authority which allows the secretary of Energy to step in during emergencies to authorize power companies to operate plants that might otherwise be closed. It’s been used in the past to bring on line plants after floods and hurricanes, to reroute power during widespread system failures, and to address manipulation of the market in California that was causing rolling blackouts. But 202 doesn’t just allow Perry to order a plant back on that might otherwise be off. It allows the DOE to pay companies for following the order.
… may prescribe by supplemental order such terms as it finds to be just and reasonable, including the compensation or reimbursement which should be paid to or by any such party.
So in an emergency, the government can act to keep the lights on, and can reward companies for cooperating. Which seems like a good idea. But in this case, it’s a different kind of emergency.
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.
Trump can’t turn on the lights for Puerto Rico, but he’s not about to let them go off for Bob Murray.
Trump and Perry first put forward a plan that would simply pay companies to burn coal in the name of higher electrical grid reliability. That plan would have helped all coal producers to some degree, but the primary beneficiary, by design, would be Bob Murray. When even the members of the Federal Energy Regulatory Commission—who were appointed by Trump—unanimously smacked down this plan, Murray and others began to complain that there was no way their companies could survive.
Not because of any “war on coal,” which never existed in the first place. But because coal has been consistently losing out in the marketplace for a decade, to both natural gas and renewable energy. As prices for wind and solar have come steadily down, things have gotten ever worse for coal. Even as Trump has been making promises left and mostly right, coal plants have continued to close and coal jobs have dropped by 1,000 just since September.
The only way for squirrel-whisperer Murray and others to survive is if Trump can rig the market and protect them from that demon capitalism. Because if they have to fight on a level playing field, they’ve already lost.
Just last month, Murray once again called on the Energy Department to use its emergency authority to aid FirstEnergy coal plants. “The secretary can do it,” Murray said in an interview at the time. “It would be the right thing to do for America.”
Firing up not just the FirstEnergy plants but Section 202 to prop up the guy who provides Trump with all his coal miner props would put Trump and Perry on some iffy legal ground … but it’s not as if either of them would have to pay a fine or sweat out any charges. The worst thing that could happen is that a judge could rule that the scheme to prop up coal on the taxpayer dime had to be shut down. Which is essentially what the FERC regulators already did when they nixed the “reliability” plan that Perry advanced in the fall.
The failure of that plan allowed multiple coal plant closures to proceed on schedule. Paying FirstEnergy to keep is non-competitive coal plants in operation would seem to be an even more obvious ploy, and unlikely to be something that could be sustained for long—especially as Section 202 authority is meant to be “temporary.”
But Trump and Perry will likely just move to scheme No. 3 when this one fails. After all, it’s important that they prop up the idea they’re creating coal jobs. Even if they’re not.