Dive Brief
- President Donald Trump said on Thursday his administration is "looking at" issuing an emergency order through the Department of Energy to keep coal and nuclear plants in the PJM Interconnection online.
- The president's off-the-cuff remarks in West Virginia follow a request from utility FirstEnergy for an order under Section 202 of the Federal Power Act to save generators at risk of retirement. Trump said he would "be looking at that as soon as we get back" to Washington.
- Senior DOE officials previously said the agency "would never" use a Section 202 order to keep uneconomic plants open. Trump's comments come a day after he reportedly dined with Jeff Miller, a lobbyist for FirstEnergy and GOP political operative who ran the 2016 presidential campaign of Energy Secretary Rick Perry.
Dive Insight:
Filed March 29, FirstEnergy's letter to DOE requested the agency use its authority under Section 202(c) of the FPA to ensure "just and reasonable cost-based rates" for generators that have 25 days of onsite fuel supply and are not recovering their costs currently.
FirstEnergy wants the cost supports to remain in place for four years or until "PJM markets have been fixed to properly compensate these units for the resiliency and reliability benefits that they provide, whichever is later."
The utility's appeal to DOE comes after the agency failed in its attempt to enact subsidies for many of the same generators through a proposal at the Federal Energy Regulatory Commission. In January, FERC regulators rejected the DOE's plan unanimously, writing the agency and its supporters — including FirstEnergy — did not prove that a reliability emergency exists in PJM or other wholesale power markets.
Section 202 orders are infrequent and are typically issued to secure power supply during natural disasters or other grid emergencies, not as the result of market conditions. In February, DOE Assistant Secretary Bruce Walker told Utility Dive he wanted to continue that precedent.
"We would never use a 202 to stave off an economic issue," he said. "That's not what it's for."
Walker's comments came after Bloomberg reported that DOE officials were internally considering an emergency order for PJM plants. And last August, Perry reportedly denied a request from coal miner Murray Energy to deploy the same authority for coal generators.
"Since I would be the one writing it, I can tell you it's never come to my attention, nobody's talked about it, nobody in my department is doing anything with it," Walker said. "It does not exist."
In an email statement Thursday, DOE spokesperson Shaylyn Hines said the application is "currently under review."
FirstEnergy's appeal to DOE may be its last chance to save its merchant generation fleet. The day before its letter to Perry, the company announced it would retire three nuclear plants early. Last Saturday, its generation subsidiary, FirstEnergy Solutions, filed for bankruptcy.
