Trump Twists the Law to Bail Out Coal

As you may have heard, President Trump has a new toy – national security – that he’s using to sidestep congressional oversight and funnel taxpayer dollars to his fossil fuel buddies.

First, he weaponized “national security” to impose tariffs designed to stifle the economic competitiveness of solar power (it didn’t work). Now, he’s using it as misguided rationale for ordering the Department of Energy (DOE) to bail out uneconomic coal plants on our dime to the tune of billions of dollars, according to estimates. His hiding behind national security is like me hiding behind a lunchbox – it doesn’t work.

Unfortunately, if the Trump Administration gets away with it, there are profound consequences for our wallets, our environment, and yes – our national security.

A leaked memo first reported by Bloomberg News details a plan by the DOE – officially ordered by President Trump on June 1^st – to artificially prop up uneconomic coal and nuclear plants. “But wait,” you may be thinking, “hasn’t this administration already tried this and failed?” Yes, they have, and it did.

What’s different this time is the President’s inappropriate use of the federal government’s authority under two laws, the Federal Power Act and the Defense Production Act, to keep uneconomic plants operating based on the uninformed (and purposely misleading) contention that bailing out these plants improves the resiliency of America’s electricity supply and protects against theoretical cyber attacks on our energy infrastructure.

Where to begin on the many ways this proposal falls flat?

Before we dig into how these two laws are actually meant to be used, just for a moment consider the facts that:

• the Federal Energy Regulatory Commission (FERC) and the electricity grid operators it regulates agree: the current trend of coal and nuclear plant retirements does not pose a threat to our electricity supply;
• FERC unanimously rejected a similar proposal based on similar ill-informed rationale earlier this year;
• The North American Electric Reliability Corporation found resilience is improving in its 2018 State of Reliability report,
• DOE’s March 2018 Multiyear Plan for Energy Sector Cyber-security never mentions coal, and
• the overwhelming opposition to Trump’s proposal from basically everyone except the owners of coal and nuclear plants asking for a handout.

This constitutes almost sector-wide agreement that there is no specific crisis that would warrant emergency orders under the guise of national security.

Outgoing FERC Commissioner, Robert Powelson, described Trump’s proposal as “the greatest federal moral hazard we’ve seen in years and something that would be the wrong direction for us to venture down.” In sum, when considered in the context of what the electric industry is saying, President Trump’s and DOE’s claim of a national security crisis falls flat.

Our president – charged with enforcing the law – is abusing the law (again)

What it all boils down to is the distinction between:

• Appropriately using the law to solve a specific, identified problem with a specific, targeted solution, as opposed to
• Stoking fear over broad, generalized claims of risk, then offering half-baked solutions that are poorly-disguised handouts to your political cronies.

Both the Federal Power Act and the Defense Production Act give authority to the DOE and President respectively to order power plants to continue operating when the nation’s electricity supply is truly threatened or to address a well-defined national security threat. But neither has ever been used in as broad and sweeping way, or under such flimsy rationale, as President Trump envisions.

The two laws at the center of it all

 The Federal Power Act has been used to enable DOE order specific power plants to continue operating when their shutdown threatens reliability. But it’s historically been used as a scalpel, not a sledgehammer – applying to a very select group of power plants for a short period of time in response to a well-defined, specific reliability issue. By “well-defined,” I mean based on analysis, input from experts, and initiated by those responsible for keeping the lights on. DOE pointed to the Federal Power Act in last year’s similar, failed proposal from DOE that was unanimously struck down by FERC.

What’s new this time is the Defense Production Act that has been thrown into the mix. This law was passed in 1950 at the beginning of the Korean War. For over fifty years, this law has stood to ensure the nation’s industries are responsive to the needs of the U.S. during times of legitimate crisis, such as when a hostile force invades the U.S. or one of our allies, or when materials are needed to respond to a national disaster. These are actual events that require immediate and effective responses, not hypothetical and wildly broad threats dreamed up to push a political agenda. By twisting the law into this broad authority to interfere with the nation’s free markets, President Trump is abusing his authority and throwing out decades of precedent.

Take, for example, America’s communications network. Obviously, maintaining channels of communication is of a national security interest and faces its own cybersecurity threats. But does that mean we should all be required to install rotary phones in our homes because the CEO of a rotary phone company sat next to President Trump at a fundraiser, wrote him a check, and over their steak dinner lamented how the rotary phone business isn’t what it used to be? I hope not.

That’s exactly the type of scheme President Trump is trying to force on American consumers.

How about real solutions that build resilience?

To be clear, cybersecurity threats are a real issue and we need to be vigilant about addressing them. And there are agencies and organizations working together to assess and respond to real, identified threats to our electricity system. Recommendations are on the table to improve coordination and communication, strengthen investments, and harden our energy infrastructure against cyberattack. None of them that I’ve seen mention paying billions of dollars to outdated, inefficient, and dirty coal plants. In fact, a number of cyber experts have decried this bailout plan’s ability to keep us safe from cyberattacks.

The question in my mind is: if we’re spending billions to bail out coal and nuclear plants on the premise of national security, what real solutions aren’t we spending that money on? By diverting attention from real solutions, President Trump’s proposal actually makes us less safe. Further, keeping uneconomic coal plants operating on the consumer’s dime only exacerbates the real national security threat –  both here and abroad – that is climate change.