Power plant owners are urging President Trump to reject a plea by a Ohio power provider to save its fleet of coal and nuclear plants that are slated to shut down in the next three years, saying it would be legally wrong and jeopardize his America First agenda.
The Electric Power Supply Association, representing merchant power plant owners, sent Trump a letter Thursday night, expressing concern over his recent remarks supporting an emergency relief order for First Energy under the Federal Power Act to keep the plants running. Trump told a crowd in West Virginia last week that he is taking a serious look at approving the order.
“EPSA writes to you today, because granting the [First Energy] request, or providing other forms of assistance to a subset of competitors, is fundamentally at odds with the wise course you have charted for the country,” the group wrote. “This includes your goals of robust economic growth, improving U.S. competitiveness, and modernizing infrastructure, including the power grid.”
John Shelk, the CEO of the group, told Trump that it would be unwise to approve First Energy’s petition for emergency relief under section 202(c) of the Federal Power Act, saying such an action would not be supported by the law.
“There is simply no emergency,” Shelk wrote, explaining that there would be “widespread negative ramifications if it were to be granted.”
Section 202(c) is meant to be used in times of war or severe supply disruption. Critics of the petition say the company’s application asks for a form of relief not spelled out under the law. Also, the power plants are not slated to close for three to four years.
First Energy submitted its application shortly after announcing it was closing three of its nuclear plants, which was followed by its subsidiary First Energy Solutions filing for bankruptcy protection.
The company has been hit by low-cost natural gas power plants, which are out-competing coal and nuclear plants. That is especially the case in the federal markets overseen by the Federal Energy Regulatory Commission. First Energy’s plants are in PJM Interconnection, the largest restructured electric market in the country.
Giving First Energy’s facilities in Ohio and Pennsylvania federal relief would constitute an unfair competitive advantage, not only harming First Energy’s competitors, but also the consumers and businesses that rely on the energy they provide, Shelk said.
He also pointed out that the Energy Department, which would approve any emergency relief order, has not provided a way for groups and the public to provide formal comments on the petition.
Energy Secretary Rick Perry, who faced questions about the petition in the House Thursday, said a formal process for public comment has not yet been announced. However, at an energy conference on Monday, he suggested he would not approve the petition.
“My job is to find solutions to challenges that face us,” Perry said after addressing the Bloomberg New Energy Finance conference in New York. “The 202(c) may not be the way we decide is most appropriate — the most efficient way to address this. It is not the only play.”
Nevertheless, Perry has tapped the National Coal Council, a federal advisory board, to develop a report over the summer that gives him options on how to deal with coal plant closures.
Assistant Secretary for Fossil Energy Steve Winberg told the council at its meeting this week that Perry “has just issued a request to the NCC to prepare a report on optimizing the existing coal fleet to ensure a reliable and resilient power grid,” the council said on Friday.
The advisory council has been tapped to prepare a separate report on the “opportunities to advance U.S. coal exports,” the council said.
Both reports are due to be completed in the fall.
