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The coal-fired Brandon Shores Power Plant in Baltimore, Maryland. Photo: Mark Wilson via Getty Images

On Friday, President Trump reportedly directed the Department of Energy to order U.S. electricity markets to buy electricity from coal and nuclear generators at higher-than-market prices.

Why it matters: Trump's order would forever alter the established model of U.S. electric power markets, since investments based on market-clearing prices are predicated on the promise that governments will not intervene to reward particular constituents (e.g., coal-mine owners).

Trump's latest directive is part of a larger effort to upend the free-market system the U.S. has developed for electric power over the past 20 years: In January, the Federal Energy Regulatory Commission (FERC) unanimously rejected an administration request to require consumers to effectively subsidize coal and nuclear plants, which would have cost consumers at least $5 billion a year by pushing markets to accept higher electricity bids from coal and nuclear generators over lower ones from natural gas plants.

Last week's tactic is based on Section 202(c) of the Federal Power Act, which holds that under certain emergency circumstances (such as wartime or other extreme fluctuations in electric energy demand or supply), the Energy Secretary may order temporary facility connections and adjustments to the generation, delivery, interchange or transmission of electricity appropriate to the crisis and public interest.

Yes, but: A 202(c) order may not be legal, given the North American Electric Reliability Corporation's latest assessment, which maintains that the grid is likely to avoid blackout-causing shortages this summer, with minor concern only in Texas.

The bottom line: While the government has long provided subsidies to different energy sectors, dictating which bids buyers must accept would mark a radical departure from its traditional involvement in electricity markets.

Jay Apt is a professor at Carnegie Mellon's Tepper School of Business and department of engineering and public policy.

Go deeper

Senate Democrats reach deal on extending unemployment insurance

Photo: Alex Wong/Getty Images

Senate Democrats struck a deal Friday evening to extend unemployment insurance in President Biden's $1.9 trillion COVID-19 relief package after deliberating and halting other action for roughly nine hours, per a Senate aide.

Why it matters: The Senate can now resume voting on other amendments to the broader rescue bill.

Capitol review panel recommends more police, mobile fencing

Photo: Olivier Douliery/AFP via Getty Images

A panel appointed by Congress to review security measures at the Capitol is recommending several changes, including mobile fencing and a bigger Capitol police force, to safeguard the area after a riotous mob breached the building on Jan. 6.

Why it matters: Law enforcement officials have warned there could be new plots to attack the area and target lawmakers, including during a speech President Biden is expected to give to a joint session of Congress.

Financial fallout from the Texas deep freeze

Illustration: Annelise Capossela/Axios

Texas has thawed out after an Arctic freeze last month threw the state into a power crisis. But the financial turmoil from power grid shock is just starting to take shape.

Why it matters: In total, electricity companies are billions of dollars short on the post-storm payments they now owe to the state's grid operator. There's no clear path for how they will pay — something being watched closely across the country as extreme weather events become more common.

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