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Trump cites national security in effort to aid coal and nuclear power

President Donald Trump this week ordered Energy Secretary Rick Perry to save less-profitable coal and nuclear plants from closure. A leaked draft memo lays out several proposals, including one to order the grid to buy power from these plants and set up a national production reserve. Bloomberg reporter Jennifer Dlouhy joins Hari Sreenivasan to discuss the legal issues at hand.

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  • HARI SREENIVASAN:

    The operators of coal and nuclear power plants got a boost from the Trump administration this week. The president ordered Energy Secretary Rick Perry to “prepare immediate steps” to stop the often unprofitable plants from shutting down. Proposals include ordering power grid operators to buy electricity from coal and nuclear plants even though natural gas and alternative energy sources are considered cleaner environmental options. Bloomberg reporter Jennifer Dlouhey obtained an internal memo outlining these controversial proposals and she joins us now from Washington D.C.. First what is the administration trying to do?

  • JENNIFER DLOUHEY:

    Well, I mean, they’re essentially looking at an extraordinary intervention in the power markets to try to save these coal and nuclear power plants that are struggling to make money in the face of competition from cheap natural gas. And they dusted off the law books and settled essentially into pretty obscure statutes to try to do this to order grid operators to buy power from these at risk plants, these plants at risk of closure, and to set up a national electric production reserve to help in times of emergency.

  • HARI SREENIVASAN:

    So, is the rational then that this is a national security issue that the grid needs to be stable?

  • JENNIFER DLOUHEY:

    Absolutely. They’re asserting that this is a national security concern that the grid is threatened by the premature closures of these plants. They argue that nuclear plants and coal power plants they have fuel onsite so they’re a little bit more durable and resilient they can snap back more quickly after an emergency or a cyber attack. This is the assertion that the Energy Department is making and they’re saying that you know our Defense Department installations are 99 percent dependent on the U.S. electric grid and that the grid itself is threatened when coal plants and nuclear plants retire because that means that we have more natural gas power, we’re more dependent on natural gas power and we’re more dependent on renewable power that doesn’t get produced around the clock.

  • HARI SREENIVASAN:

    Another line of thinking would be if the military is so dependent on the specific types of energy, shouldn’t they actually diversify it to make sure that they have resiliency after a storm? I’m assuming that some of the critics are pointing to a different type of logic here?

  • JENNIFER DLOUHEY:

    Right. Absolutely. You know the critics say that you can make our grid more durable and in fact, it has become more reliable because it is becoming more diverse by you know, we’re getting our power increasingly from a wider array of sources and that that actually helps buffer us from emergencies. You know what’s interesting is is the Energy Department and the administration is routing its argument here and national security probably partly for legal reasons to help buffer them from a legal challenge down the road. But the Energy Department’s own analysis has found that the grid is more reliable because it has power coming from a wider array of sources.

  • HARI SREENIVASAN:

    Speaking of those legal challenges, I’m assuming this is going to get sorted out in the courts. Nothing actually happened as of yesterday or tomorrow. What’s the likely timeline of this now?

  • JENNIFER DLOUHEY:

    Well I think we’re looking at it. Most analyst I talked to, look at the memo that I obtained and the action that we’ve seen over the past couple days and think some action is going to happen in coming weeks. It’ll probably be a directive from the Energy Department spelling out the logistics of this plan exactly what grid operators have to do. But opponents, you know, whether it’s the oil industry, the wind producers and environmentalists, they’ve all indicated that they plan to march right into federal court and to file challenges to this again. You know, I think the fact that the Energy Department is rooting this in national security needs is an effort to insulate itself. It’s also a temporary intervention planned for only two years but the courts will decide. I think that’s almost a given at this point.

  • HARI SREENIVASAN:

    Jennifer Dlouhey of Bloomberg joining us from Washington. Thanks so much.

  • JENNIFER DLOUHEY:

    Thank you.

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