Trump looks to radically reshape power plant oversight — and boost coal

Yahoo

09-04-2025

Tyson Slocum knew the Trump administration had an aggressive plan to bail out dirty, expensive coal plants. He was just waiting for it to put the idea in writing.
His wait is over. President Donald Trump signed several executive orders on Tuesday to boost the moribund U.S. coal industry. Among those directives, one stands out for its potential to radically reshape how the U.S. regulates power plants: an executive order titled 'Strengthening the Reliability and Security of the United States Electric Grid.'
The order instructs Energy Secretary Chris Wright, a former gas industry executive who denies that climate change is a crisis, to give the Department of Energy sole control over key grid-reliability decisions currently made by independent agencies. The Energy Department would be empowered to keep unprofitable and polluting coal plants open in the name of reliability — and stick utilities, customers, and communities with the hefty financial and health costs.
Slocum, director of the energy program at nonprofit watchdog group Public Citizen, says the executive order closely follows a plan leaked during the first Trump administration to use federal emergency powers to override state, regional, and federal authorities that now govern reliability across the U.S. electricity sector. Administration officials disavowed that approach when it came to light in 2018.
Still, in a blog post published two days after the November 2024 election, Slocum predicted the Trump administration would revive this strategy, which he described in a Tuesday interview as 'the Department of Energy muscling in on reliability in ways that can be abused.'
Trump's other Tuesday executive orders aim to lift restrictions on coal mining, fast-track coal leases on federal lands, and free coal plants from air-pollution regulations. But among those actions, the executive order focused on reliability may be the surest way to protect the industry from the economic realities that have pushed it into decline.
Coal, the most polluting and carbon-intensive source of electricity, has fallen from nearly half the country's generating capacity in 2011 to just 15% last year. Cheaper fossil gas and even cheaper clean energy and batteries have decimated its economics. Over 120 U.S. coal plants are slated to shutter over the next five years.
'The only way to revive coal is to do two things,' Slocum said. 'One is to force ratepayers to pay for it. That means electricity's going to get more expensive to bail out what's probably, at this point, one of the most expensive forms of energy out there. The other thing they need to do is pollute clean water, foul the air, and contribute to the climate crisis — because that's what coal plants do.'
States regulate utilities and thus have primary authority over the nation's electricity generation. Even within competitive energy markets, where many power plants are owned and operated by companies that aren't regulated utilities, states retain significant say over which plants are built, kept open, or closed down.
But the federal government also has significant powers, as laid out in the 1935 Federal Power Act. Those include regulating the bulk power system — the network of high-voltage transmission lines crossing state borders and the power plants, solar and wind farms, battery banks, and other resources that keep those grids humming.
Two entities are primarily responsible for grid reliability under current law: the Federal Energy Regulatory Commission, an agency with commissioners appointed by the president but traditionally independent from political interference, and the North American Electric Reliability Corp., a nonprofit regulatory authority that includes utilities and grid operators in the U.S. and Canada.
FERC and NERC commonly issue recommendations or mandates on grid reliability. NERC warned last year that much of the country faces looming reliability challenges due to power plant closures, bottlenecks in interconnecting new generation, lack of investments in expanding transmission grids, and expectations of rapid growth in electricity use. Republican lawmakers and a number of utilities have cited these conditions to call for keeping coal plants open past planned closure dates.
The mechanisms by which the federal government ensures the reliability of the grid are set out in Section 215 of the Federal Power Act, said Sanjay Narayan, a managing attorney at Sierra Club's environmental law program. Over the decades, he said, FERC, NERC, regional grid operators, and state-regulated utilities have established 'elaborate regulatory processes that ensure there are adequate reserve margins.' Reserve margins are the generation capacity needed to maintain grid reliability during peaks in power demand, major grid failures, extreme weather events, and other emergencies.
But another section of the Federal Power Act — Section 202(c) — gives the federal government some extraordinary powers. It allows the energy secretary to order certain power plants to keep running during emergencies, and to waive federal and state environmental rules to allow them to do so without threat of lawsuit or regulatory punishment.
Those orders are almost always temporary, lasting a few hours to a few days, and reserved for 'when unexpected events, mostly weather-related, threaten short-term outages,' Narayan said.
In a few instances, DOE has ordered a power plant to stay open until new power lines can be built to prevent grid-reliability threats, he said. Utilities and grid operators have similar authority, which they have used to keep plants running for years past their planned retirement dates.
But Section 202(c) authority has never been used 'to force ratepayers to subsidize politically favored parties who can't compete in the market,' Narayan said. 'And nothing about long-term reserve margins fits within the statutory or common understanding of an emergency, which is what Section 202 is meant to address.'
Tuesday's 'reliability and security' executive order seeks to extend those emergency powers indefinitely, Slocum said. It gives DOE sole jurisdiction to determine whether any power plant in the country can close or whether it must stay open until DOE says it isn't needed anymore.
First, the executive order tasks DOE with creating a 'uniform methodology' for analyzing 'current and anticipated reserve margins' for all transmission grids regulated by FERC. Then it orders DOE to identify regions where reserve margins are or could be 'below acceptable thresholds' — essentially, telling DOE to recreate the reliability risk-assessment work that FERC, NERC, regional grid operators, and state regulators and utilities already do, but with no outside input or oversight.
Finally, it orders DOE to establish a 'protocol to identify which generation resources within a region are critical to system reliability,' and use 'all mechanisms available under applicable law, including section 202(c) of the Federal Power Act,' to prevent any 'critical' generator larger than 50 megawatts 'from leaving the bulk-power system' — or changing the type of fuel it uses — if that would violate DOE's reserve margin methodology.
In simple terms, instead of FERC, NERC, grid operators, utilities, state regulators, and policymakers working together under their established spheres of authority to independently study and manage grid-reliability needs, the energy secretary would 'unilaterally set his own reserve margins,' Slocum said.
Then, 'if things fall below his arbitrarily set reserve margin, he can declare a Section 202 emergency' to prevent power plant closures in the relevant grid region, he said. Because power plant owners must be compensated for operating those facilities, this equates to forcing utilities or energy markets to pay them to stay open, whether or not their electricity is cost-competitive.
The executive order outlines no role for any other federal agency or other stakeholder in this new process.
'The Secretary of Energy can set whatever reserve he wants,' Slocum said. 'It's not in consultation with [grid operators], or FERC, or NERC. It's a unilateral, arbitrary standard.'
Many utilities already plan to delay coal plant retirements to ensure they can meet growing power demand from AI data centers. Representatives of U.S. regional grid operators told members of Congress in a hearing last month that retaining existing generation is their top reliability priority.
But giving one agency complete control over those decisions 'could undermine years of industry progress in determining the reliability value of different power-generating resources,' said Devin Hartman, director of the energy and environmental policy team at free market–oriented think tank R Street Institute. 'Ensuring economical power plants are not forced to close by the government should be a reform priority. But this intervention risks disrupting markets and deterring new supply.'
Meanwhile, clean-energy backers and climate advocates argue that the nation's biggest grid-reliability problem isn't coal plants closing. Instead, they blame the inadequate grid buildout and clogged interconnection queues that have prevented developers from bringing online hundreds of gigawatts of solar, wind, and battery projects — all cheaper than coal and often fossil gas, too.
Energy law and policy experts were quick to point out how radically Tuesday's executive order would undermine decades of regulatory and legal precedent.
'This EO imagines that a 90-year old law about power sector 'emergencies' empowers the Dept of Energy to subsidize any power plant in the country,' Ari Peskoe, director of Harvard Law School's Electricity Law Initiative, wrote in a Tuesday Bluesky post.
Mike O'Boyle, acting policy team director at think tank Energy Innovation, told Canary Media that the executive order 'threatens the very heart and mission of both competitive wholesale markets as well as state planning and procurement processes. In that way, it amounts to a statement from the federal government that federal and state energy regulators are unable to do their jobs,' he said.
It's also poor practice in terms of solving grid-reliability challenges, O'Boyle said. Studies from Energy Innovation, other independent energy analysts, and researchers at DOE-run national labs show that coal plants are not the linchpin of grid reliability that their backers insist they are and that power grids have been able to integrate high levels of renewable energy without sacrificing grid reliability.
'If the Department of Energy decides to do this exercise honestly,' it will find that 'reliability risk is highly concentrated in only a few hours of the year,' he said, 'and that there are in many cases more and cheaper resources than coal plants that are available to meet that need.'
But Slocum said he fears Wright, the founder and former CEO of fracking giant Liberty Energy, will use unilateral DOE authority to structure a methodology that overvalues fossil fuels' contribution to grid reliability. Wright has consistently and frequently claimed fossil fuels are superior to renewables, at times citing demonstrably false information.
For example, Wright said at last month's CERAWeek energy conference in Houston that 'everywhere wind and solar penetration have increased significantly, prices on the grid went up and stability of the grid went down.' That statement contradicts data that shows renewable energy penetration is not correlated to higher electricity prices and that major wintertime U.S. grid-reliability failures in Texas in 2021 and across the Southeast in 2022 were linked to failures of fossil-fueled power plants.
Giving one presidential appointee with a clear bias toward fossil fuels sole authority over every proposed power plant closure in the country exposes core reliability decisions to political considerations, Slocum added. That stands in stark contrast to the role played by FERC, whose commissioners are appointed by the president and confirmed by the Senate, but who have traditionally made decisions independently.
That distinction is important, he said: Independent FERC commissioners already rejected the first Trump administration's attempt to use federal power to force coal plants to stay open.
In 2017, then–Energy Secretary Rick Perry attempted to implement federal rules that would have declared coal and nuclear plants vital to grid reliability. That plan was unanimously rejected by five FERC commissioners — four of whom were appointed by Trump — on the grounds the administration lacked legal authority to carry out the changes it had proposed.
Officials serving in the first Trump administration also undermined the idea that DOE's Section 202(c) emergency authority is appropriate for ordering power plants to remain open for long periods of time outside of pressing grid emergencies. After media reports surfaced of the leaked memo laying out a plan to do so, Assistant DOE Secretary Bruce Walker stated the department 'would never' use that emergency authority to keep uneconomic generators online.
That statement is in keeping with the law, said Pavel Molchanov, investment strategy analyst at financial services firm Raymond James.
'As a matter of statutory language, Section 202(c) is for emergency situations in the power market,' he said. 'It is emphatically not intended to be used for keeping non-economic power plants in operation.'
Any orders to force coal plants open that would otherwise be preparing to close down would almost certainly end up driving up energy costs.
Midwestern utilities are already pushing billions of dollars of unnecessary costs onto their customers by running coal plants at times when cheaper power could supplant the energy they're delivering to the grid. A 2023 Energy Innovation report found that 99% of U.S. coal plants could be replaced with solar, wind, and batteries at a net cost savings to utility customers.
'If they pull the 'must-generate' lever, they're simply going to be taking market share from cheaper gas and renewables,' Narayan said. That's the equivalent of 'taking money — the additional cost of running more expensive sources — out of ratepayers' pockets.'
John Moore, senior attorney with the Natural Resources Defense Council, also highlighted the climate, environmental, and health harms caused by burning coal and disposing of the toxic ash left behind. A 2023 study from the National Institutes of Health found that pollution from coal power plants was responsible for 460,000 deaths between 1999 and 2020.
'The patient is beyond recovery at this point,' Moore said of the coal industry. 'Any attempts to focus on coal specifically will just harm and kill more people and cause more environmental damage.
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