Trump preparing to order grid operators to purchase power from specific plants

It’s one thing to tinker with the rules and quite another thing to suspend them.
In recent months, the Trump administration’s intervention in the economy has seemingly substituted government decree for market forces.
Undoubtedly, winners and losers are a natural outcome of simple market fundamentals.
And no one here would argue that governments — federal and state — have dabbled in market forces.
For instance, the Obama administration’s support of subsidies for wind and solar power.
About 30 states mandate minimum purchases of renewable energy, while some give specific companies or industries tax credits or subsidies.
It’s also understood in the event of major natural disaster or a world war the government does have the authority and the responsibility to direct large swaths of the economy.
However, last week a leaked 41-page internal memo indicates the Trump administration is planning drastic action to artificially revive the besieged coal industry.
This administration has continued to boast of gains in the coal industry’s bottom line for more than a year now, yet it appears to be worsening.
Locally, two major coal mines have closed in our region since December. News of coal-fired power plants’ closures have not abated, either. The Sierra Club recently reported 25 coal-fired power plants have been shuttered since President Trump took office. That’s despite efforts to stave off powerful market forces, including:
Rolling back regulations, ranging from preventing dumping fill into streams to easing up on coal ash dump rules.
Calling on the Federal Energy Regulatory Commission to provide financial returns to power plant to stockpile 90 days worth of fuel on site.
Imposing tariffs on imported solar panels and steel.
On Friday, a leaked internal memo called on the president’s energy secretary to “prepare immediate steps” to stop the closure of coal-fired and nuclear power plants.
One extreme proposal being explored is allowing for the Department of Energy to order grid operators to buy electricity from coal-fired power plants for two years.
That order would be authorized by invoking either Section 202(c) of the 1920 Federal Power Act or the 1950 Defense Production Act.
Both these laws apply to acting in crisis conditions. Neither of these laws was ever designed to extend corporate welfare to unprofitable industries.
Requiring purchases of anything from particular sites for two years is contrary to the way markets operate.
Such intervention may benefit some, but consumers are inevitably going to pay more for electricity.
If it’s not legally indefensible in a court of law, that’s lights out in the court of public opinion.