February 8, 2018, 8:34 PM EST
After failing to win a bailout for cash-strapped coal plants, the Trump administration is considering emergency orders that could keep at least some coal generators online, people familiar with the discussions said.
Rick Perry may 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. The Energy Department is considering this option after federal regulators rejected a proposal by Perry last month to pay coal plants more for their “resilience,” they said.
When asked to confirm the talks, agency spokeswoman Shaylyn Hynes said “that is not correct information” but declined to provide further detail.
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 that 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 the Energy Department is considering using a 202 order, it may still decide to pursue other options. 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 act on an alternative to Perry’s rejected plan. But he emphasized that the Energy Department is prepared to act alone if it doesn’t.
“We have authorities that we can use when the need arises,” Menezes said, when asked if the agency could take its own action to keep coal and nuclear plants from retiring. “They’re well known. And we’ll use them if we need to.”
Just last month, Murray once again called on the Energy Department to use its emergency authority to aid 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.”
Murray Energy Corp. spokesman Gary Broadbent said Thursday that he wasn’t aware of any action by the Energy Department to invoke its 202 authority but described such a move as “an excellent action” to address grid reliability. FirstEnergy spokeswoman Jennifer Young similarly said she wasn’t aware of the effort but said the company supports any measures to keep plants operating.
— With assistance by Jim Polson, and Tim Loh