After word went out that President Trump might be issuing executive orders to stop closures of nuclear and coal power plants, coal stocks have been seeing a rise.
What Trump Did
Nuclear and coal power plants have been closing down early over the past few years. This is mainly due to being out-competed by natural gas as well as renewable energy such as solar and wind farms.
In tune with his election days’ views of the dwindling coal industry, on Thursday, Trump ordered Rick Perry, the Energy Secretary, to prevent coal and nuclear power plant closures. This marks the administration’s second attempt at preventing such closures. Last year, five bipartisan regulators had unanimously refused Perry’s plan to make it mandatory for regional markets to compensate nuclear and coal plants for their contribution to the US electrical grid.
In light of this, Arch Coal and Peabody Energy have both seen a rise in their stocks since Friday. Arch Coal is up to $84 per share, showing a 2.2% rise, and Peabody Energy’s shares were up to $45.22 per share, showing a 9% rise.
The Executive Measures
According to Bloomberg News, The Trump administration is also reportedly considering using executive powers to prevent the closures citing national security reasons. They would reportedly be forcing purchases to be made through the coal and nuclear plants that have been outcompeted.
They are planning to use the Federal Power Act, one of the most rarely used executive powers, which grants Perry the authority to prevent their closures during wartime. Another rarely used executive power is the Defense Production Act, which would give Trump the national defense authority to influence the US industry.
According to Bloomberg News, these emergency measures would continue until 2020 “to forestall any future actions toward retirement, decommissioning or deactivation” until the study evaluating the US electric grid’s reliability yields fruit.