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Department of Energy recommends bail out of failing coal plants

Department of Energy recommends bail out of failing coal plants

The recent "bomb cyclone" system of extremely cold weather in the northeast this winter showed off that the grid could operate well despite coal retirements. (Read the Memo Here) According to the memo, the Energy Department is to instruct grid operators to purchase power from a list of designated plants. The document, dated May 29 and distributed Thursday, is marked as a "draft", which is "not for further distribution", and could be used by administration officials to justify the intervention. The move by Trump is also in line with some of his top supporters, including coal moguls Robert E. Murray and Joseph Craft of Alliance Resource Partners, who donated a million dollars to the president's inauguration.

Energy Department representatives did not respond to an emailed request for comment. The plan calls for Perry to use the Federal Power Act and the Defense Production Act to temporarily delay retirements of coal and nuclear plants.

Colstrip's two oldest units, 1 and 2, are slated to shut down by 2022 as part of a settlement agreement between the plant's owners and utility regulators in Washington state, where Colstrip sells most of its power.

Over dozens of pages, the memo makes the case for action, arguing that the decommissioning of power plants must be managed for national security reasons and that federal intervention is necessary before the US reaches a tipping point in the loss of essential, secure electric generation resources.

The memo envisions requiring electricity purchases from coal and nuclear sources for a two-year period, which the Energy Department would use to study shortcomings in the USA electricity system.

Maria Korsnick, president and CEO of the Nuclear Energy Institute, applauded Friday the administration's effort to retain nuclear facilities as national security assets though she admitted to not having seen the details of the reported proposal.

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Coal and nuclear are considered "baseload" fuels, meaning they can supply a consistent amount of power for long periods of time, with abundant fuel stored at plants where it will be turned into electricity. Perry argued that losing the plants could threaten the nation's power grid.

"As the world's largest producer and refiner of oil and natural gas, which today is the number one source of USA electricity, our nation is on track to achieve the President's vision for energy dominance", Snitchler says.

American power generators are expected to retire - or announce the retirements of - 16,200 megawatts of coal-fired and 550 megawatts of nuclear plant capacity this year, according to Bloomberg New Energy Finance. The owner of the Three Mile Island nuclear plant has said its plant has been unprofitable for six years.

The placation of private thermal power companies from the Ministry comes in the wake of government's decision to make "out of turn coal allocation to government thermal power plant", which private power companies have labelled as "discriminatory and a distortion of a level playing ground based on ownership of the power generation plants".

In January the Republican-led Federal Energy Regulatory Commission (FERC) rejected a different proposal from Perry that sought to pay coal and nuclear plants for their resiliency and reliability services.

"President Trump has directed Secretary of Energy Rick Perry to prepare immediate steps to stop the loss of these resources, and looks forward to his recommendations", Sanders said Friday. In particular, he was lobbying on behalf of Murray Energy's biggest customer, FirstEnergy, which ultimately filed for bankruptcy in March 2018. The National Coal Council said in a statement Friday that existing coal facilities provide "direct economic benefits, energy and price stability, job-creating opportunities and environmental benefits".