THE LAWLESSNESS OF TRUMP'S COAL AND NUCLEAR BAILOUT

[Rhiannon12866]

Donald Trump’s latest gambit for bailing out coal and nuclear power plants is a two-year plan directing grid operators (and thus ultimately consumers) to pay designated plants enough “to forestall any further actions towards retirement, decommissioning, or deactivation.” The U.S. Department of Energy (DOE) will then supposedly use this time to figure out a permanent fix for two problems allegedly posed by these retirements.

The first of the alleged “problems” is that the resiliency of the U.S. electrical grid depends on these “fuel-secure” plants. But we’ve been down that road before, and no one is any more impressed with this argument now than they were when it was first floated – and shot down by the Federal Energy Regulatory Commission – last year.

The second of the alleged “problems” is that plant closures would threaten national security. If patriotism is the last refuge of a scoundrel, then “national security” is the last resort of a desperate politician. As we noted last time around, there is no way to shoehorn a coal and nuclear bailout into the confines of section 202(c) of the Federal Power Act that provides for such extraordinary orders (although the draft plan gamely runs it up the flagpole once again). And so the administration has glommed on to the Defense Production Act (DPA), another statute that gives the president emergency powers allowing him to circumvent the normal administrative process.

Two justifications are floated for using the DPA. First, that Defense Department facilities, like everything else, depend on the grid for their electrical supplies, and threats to grid resiliency are thus threats to national security. This rings hollow. The Department of Defense presumably ensures that its facilities have backup generation available for critical operations in the event of a grid outage. And if it doesn’t, it damn well should. Period.


More: https://niskanencenter.org/blog/the-lawlessness-of-trumps-coal-and-nuclear-bailout/

[Scurrilous]

1. K&R

[modrepub]

2. Will Create More Bankruptcies

If this program puts a "place holder" on a portion of the power grid reserved for coal and nuclear plants then it will cause the other producers to compete over the remaining portion of electricity production. Most of the gas and renewable plants are of more recent construction. They are thus heavily in debt; most plants figure on paying off their financing over a long time horizon, like paying off a 30-year mortgage. If these heavily financed plants can't sell enough electricity to pay off their loans because a portion of the grid is reserved for coal and nuclear then there are potentially going to be additional bankruptcies in the energy sector. Banks and finance groups who have loaned out billions of $ are going to have to write off these loans or go bankrupt themselves.

It's obvious that Trump and his cronies have no idea how capitalistic markets work. I'll lay it out for them. The price one charges for any product must cover the costs to actually produce that product. The cost of production of any product must constantly be minimized.

[Rhiannon12866]

3. Excellent analysis, thank you!

It's blatantly obvious by now that he has no idea what he's doing - and there's a reason he went bankrupt himself numerous times.

[Fritz Walter]

4. Simply put, utility companies aren't buying it

THIS is what they're doing to the high-cost coal-burning plants. This happened less than 24 hours ago in Jacksonville FL, a drumpf strong-hold.

[Rhiannon12866]

5. Thanks! I knew that I had just seen that somewhere! Incredible!

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