Trump Administration Orders Power Plant Subsidies

Late last week Bloomberg News reported that President Trump had ordered Department of Energy Secretary Rick Perry to prevent the retirement of some nuclear and coal power plants.

The move will require customers to subsidize unprofitable power plants that cannot compete in the generation market.

The bailout proposal had been sought by Ohio utility FirstEnergy and its bankrupt affiliate FirstEnergy Solutions, which owns three nuclear power plants and several outdated coal power plants.

The order is unprecedented in its novel usage of national security to justify the bailout.

The OMA has been an active opponent of state and federal power plant subsidies that distort the function of the market.

Manufacturers in the PJM region can expect to see a new charge on power bills that will not offer any benefit to customers or solve a legitimate problem. PJM Interconnection, the grid operator in 13 states, issued this statement.

Here’s a brief summary from OMA energy counsel Carpenter Lipps & Leland. Needless to say, we will keep members posted. 6/7/2018