Depending on what the Trump administration decides, an intervention to prop up unprofitable coal and nuclear plants could cost consumers between $311 million to $11.8 billion per year, according to a preliminary estimate by Robbie Orvis, director of energy policy design at Energy Innovation. The National Security Council was set to meet Friday to discuss the Energy Department's latest idea for shoring up the facilities.
But federal energy regulators have rejected that argument and turned down a proposal late a year ago from Perry to subsidize nuclear and coal plants for providing "resilience" to the grid.
The White House-sponsored DoE memo reportedly states that "too many of these fuel-secure plants have retired prematurely and many more have recently announced retirement", while declaring that the replacement of coal and nuclear plants by natural gas and renewable power in the USA is not secure.
The draft memo also states that U.S. Defense Department installations are nearly entirely dependent on the commercial grid, furthering the argument that a reliable electric system is critical, Bloomberg reported.
As part of the plan, the U.S. Department of Energy (DOE) could exercise emergency authority under national security laws to direct the operators to buy electricity from coal and nuclear facilities, according to a memo reviewed by Reuters.
The DoE memo suggests that USA energy grid operators could be compelled to purchase power from a pre-approved list over a two-year period, "to forestall any future actions toward retirement, decommissioning or deactivation", according to Ars Technica.
A draft memo urges federal action to "stop the further premature retirements of fuel-secure generation" from coal and nuclear plants that have struggled to compete with natural gas and renewable energy sources such as wind and solar power.
The plan cuts to the heart of a debate over the reliability and resiliency of a rapidly evolving USA electricity grid. And the Energy Department would be tapping the 68-year-old Defense Production Act, a Cold War-era statute once invoked by President Harry Truman to help the steel industry.
"There is no need for any such drastic action", the company said.
Perry in September asked the Federal Energy Regulatory Commission to consider "guaranteeing financial returns" for power plants able to "stockpile" 90 days worth of fuel on site.
Opponents of the new plan contend the intervention is a solution in search of a problem and argue there are other ways to back up the grid.
Such a statement has been contradicted by several power grid operators, including PJM, one of the largest independent system operators in the country.
"Unprecedented government intervention in the energy markets to support high-cost generation will hurt customers by taking more money out of their pockets rather than letting people keep more of what they earn", said Todd Snitchler of the American Petroleum Institute, the top lobbying group for the oil and gas industry.