'National Security' Coal Bailout Collapses
Cross-posted from LegalPlanet.
In its desperate effort to save the failing American coal industry, the Trump administration promised to use emergency powers to keep coal-fired power plants in operation even though they're not economically viable. That would have been the kind of disruptive change that Trump promised to bring to Washington. But the effort seems to have gone aground, according to Politico. This outcome tells us something about the gap between Trump's promises of committing regulatory mayhem and the realities of modern governance.
The Trump plan, which originated with a coal industry magnate and major Trump donor, would have required an extraordinary stretch of the statutes in question. The plan was to use one or more of a trio of emergency provisions. The first is a section of the Federal Power Act that authorizes the Department of Energy to order generators to run during wars or other emergencies, including grid emergencies. Both DOE precedent and a D.C. Circuit case say this doesn't apply to fuel supply issues. The second statute, which traces back to the Korean War, allows the president to prioritize performance of defense contracts over civilian contracts and allocate materials, services, and facilities to promote the national …
It is widely recognized that President Trump has pushed an aggressive anti-regulatory agenda on the environmental front, but this agenda often hides a second, anti-free-market battle waged in the energy context.
For decades, Congress and the Federal Energy Regulatory Commission (FERC) have worked to move the country toward competitive markets in the sale of wholesale energy – energy that generators sell to utilities, or which utilities sell to each other, and then to retail customers. Congress and FERC believed that introducing more competition into wholesale markets would reduce the cost of electricity for retail consumers because increased generation and access to generation would open up a previously limited supply. In staking out this approach, policymakers and administrators also recognized that competitive markets could encourage the construction of cleaner domestic energy resources.
In large part, this move has been successful. Deregulation of retail electricity markets has in some cases …
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