From an internal memo obtained by Bloomberg News, plans seem to be under consideration by the Energy Department to order grid operators to purchase electricity or electric generation capacity from at-risk facilities. If implemented, this action could represent an unusual intervention by a government agency into U.S. energy markets where renewables and natural gas have become competitive alternatives. From the memo “Federal action is necessary to stop the further premature retirements of fuel-secure generation capacity…too many of these fuel-secure plants have retired prematurely and many more have recently announced retirement.”
Also addressed in the memo the topic of regulators who have been grappling with how to ensure that the nations power grid can withstand extreme weather events and cyber-attacks. Trump administration officials advocate keeping legacy nuclear and coal-fired plants that have fuel on-site in an always-on state of readiness, providing secure electricity generation after storms or emergencies. In order to keep these plants producing, the Energy Department would exercise emergency authority by way of federal laws from the cold-war era (‘Federal Power Act’ and the ‘Defense Production Act’) allowing it to direct operators to purchase from at-risk facilities for a period of two years. The Defense Production Act was last invoked during the California energy crisis in 2001.
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