The U.S. May Not Declare a Power Grid Emergency After All

(Bloomberg) -- Sure, President Donald Trump may have recently said his administration is considering declaring a power grid emergency to aid money-losing coal and nuclear plants. And yes, Energy Secretary Rick Perry, just hours ago, said his agency would rule on the plan as soon as it can.

But that doesn’t mean he’s made up his mind on what to do.

While bankrupt electricity generator FirstEnergy Solutions Corp. is pushing Perry to invoke his so-called 202 authority to order a grid emergency and create payments to keep plants online, Perry suggested Monday that declaring such an event may not be the best way to fix the nation’s power markets.

The request “may not be the way that we decide is the most appropriate, the most efficient way to address this," he said at the Bloomberg New Energy Finance Future of Energy Summit in New York. "It’s not the only way."

Such a move would be unprecedented. Emergency declarations are rare and have in the past been reserved for times of war, natural disasters and to prevent widespread blackouts. The last time the Energy Department declared an emergency of this scope -- one that would order multiple generators to supply power -- was during the Enron crisis in California, when hundreds of thousands of people were facing blackouts.

FirstEnergy Corp.’s FirstEnergy Solutions unit asked him to use his emergency authority on March 29, just days before filing for bankruptcy. If approved, the request would guarantee profits for a fleet of coal and nuclear power plants in the eastern U.S.

The company’s request "is being looked at as we speak," Perry said at the BNEF summit.

“We are open to all potential policy solutions that would enable our plants to continue to play their critical role in the security and resilience of the electrical grid. We welcome Secretary Perry’s engagement with this important issue,” said Thomas S. Mulligan, a spokesman for FirstEnergy Solutions.

Nora Mead Brownell, a former member of the Federal Energy Regulatory Commission who was appointed by Republican President George W. Bush, meanwhile said at the BNEF summit on Monday that the request was a “real tragedy” for a capitalist society, energy markets and ratepayers.

--With assistance from Jim Efstathiou Jr.

To contact the reporter on this story: Ari Natter in Washington at anatter5@bloomberg.net.

To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Jon Morgan at jmorgan97@bloomberg.net, Elizabeth Wasserman

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