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Last year, the Department of Energy proposed a federal bailout for power plants that could prove they had a 90-day supply of fuel on site, suggesting that imminent coal and nuclear retirements would constitute a national emergency. But the five members of the bipartisan Federal Energy Regulatory Commission unanimously rejected DOE’s proposed market intervention in January 2018, citing a lack of evidence that retiring coal and nuclear facilities would cause reliability or grid resilience concerns out of the normal course of business for the nation’s power grid.

However, a DOE memo made public earlier this summer suggests the agency is still considering exercising emergency authority to require electric consumers to pay above-market rates to ensure certain coal and nuclear plants stay online, despite mounting evidence from grid operators that these power plants are not needed.

An analysis of the original bailout proposal, conducted by Energy Innovation and the Climate Policy Initiative last year, suggested that keeping uncompetitive coal and nuclear facilities in the black could cost consumers up to $12 billion per year. A new analysis finds that that money could go a long way toward helping workers and communities transition to a new energy future.

FirstEnergy: A case for a proactive transition plan

FirstEnergy has been among the loudest voices clamoring for a coal and nuclear plant financial rescue, and it’s no wonder why — new economic realities are hitting the company hard. Its competitive subsidiary filed for bankruptcy last spring after filing a deactivationnotice for three of its uncompetitive nuclear power plants, and last week it filed worker retraining plans for these plants with federal regulators.

FirstEnergy’s market-exposed power plants would need about $1 billion per year to keep running profitably. Assuming the two-year price support referenced in DOE’s memo from earlier this summer, that would imply subsidies of about $2 billion over two years to keep six of FirstEnergy’s uneconomic plants operating.

Giving $2 billion over two years to one company is a shocking amount of money to squander in the face of underlying economic trends that show no signs of reversal. So, assuming the price supports went forward, it’s quite reasonable to think that the same retirements would be imminent for FirstEnergy at the end of the period. And the affected communities would still face the same tough economic and employment questions in two years.

But what if funds were instead directed to help impacted workers and the communities that host the power plants that can no longer compete in power markets? What if funds went directly to communities to support the inevitable transition, diversifying local economies and setting the stage for longer-lasting solutions?

n the case of FirstEnergy, if the same $2 billion were to be directed toward locally led solutions in each of their six affected communities, instead of keeping these uneconomic power plants running for two more years, it would provide more than $300 million per community.

The idea may seem far-fetched, but it’s already been implemented in New York………

The wave of coal and nuclear closures is building

Another model is emerging, as well: leveraging utility balance sheets to transition from fossil to clean energy. In vertically integrated markets like the territory of Public Service Company of Colorado, uneconomic coal power plants are being retired, with utility funds reinvested in clean energy located in the same communities, like the plan to retire a coal plant in Pueblo County and replace it with local solar and wind power plants.

In Arizona, where the Navajo Generating Station retirement threatens to devastate two Native American tribes’ economies, the future is less clear. Solar and wind resource potential on Navajo lands holds promise for longer-lasting benefits that can similarly be contrasted with proposals to prop up coal plants temporarily.

Communities where these plants are located — not the federal government and power plant owners — should be in charge of deciding how any available funds can best be spent to support them in this economic transition. If state or federal policymakers want to put workers first and support communities facing power plant closures, they could generate a more positive impact by giving any available funds to the affected communities to use however they want. They should support a just transition that diversifies local economies for long-term success. https://www.greentechmedia.com/articles/read/redirecting-trumps-coal-and-nuclear-bailout-to-fund-economic-transition#gs.YLYGSAw