United States: Federal Electricity Policy Under The Trump Administration

Stephen J. Humes is a Partner in our New York office, Beth A. Viola is a Sr Policy Advisor and Virgilio Barrera is a Public Affairs Advisor both in our Washington DC office.


  • President Obama has achieved the majority of his energy policy objectives through executive action (regulation, guidance or executive order) and, as such, most of his actions can be undone or mitigated by the incoming Trump Administration.
  • Because the electric utility industry in the United States is so heavily impacted by state and regional regulatory structures, as well as the independent regulatory authority and decisions of the independent Federal Energy Regulatory Commission (FERC), President-Elect Trump's impact on federal electricity policy is unlikely to be dramatic.
  • However, there are potential short- and long-term actions that the President-Elect can take that would impact federal policy, including appointing new FERC commissioners and undoing some of President Obama's regulations that have affected the coal industry.

The huge unknown about President-Elect Donald Trump's energy plans is in electric power. Whatever he decides, with a unified Republican Congress behind him, he has the ability to shape federal electric policy in the coming term. It is important to note that President Obama achieved the majority of his energy policy objectives through executive action (regulation, guidance or executive order) and, as such, most of his actions can be undone or mitigated by the incoming Trump Administration. However, President-Elect Trump's impact on federal electricity policy is unlikely to be dramatic, largely because the electric utility industry in the United States is so heavily impacted by state and regional regulatory structures, as well as the independent regulatory authority and decisions of the independent Federal Energy Regulatory Commission (FERC). Still, there are a couple of short- and long-term actions the President-Elect may undertake that would impact federal electricity policy.

The first immediate action a Trump Administration could take that would impact federal electricity policy is the appointment of new FERC commissioners. FERC currently has two vacant seats. Moreover, the current FERC chairman, a Democrat, has long hinted at resigning by the end of 2016. This would open another appointment for the Trump Administration and shift the balance of power in the commission. It is worth noting that if Chairman Norman Bay were to resign before the appointment and confirmation of additional members, FERC would lose the necessary quorum to issue decisions and permits. As such, the appointment of FERC commissioners will likely be among the first major actions the Trump Administration will make to impact federal energy and electricity policy.

A second, more long-term action Trump may take is to undo a number of President Obama's regulations. During his campaign, Trump vowed to scrap President Obama's Clean Power Plan (CPP), abandon the Paris Agreement and end Green Climate Fund payments to developing nations. Moreover, the President-Elect has promised that, during his first 100 days in office, he will "end the war on coal, rescind the coal mining lease moratorium ... and conduct a top-down review of all anti-coal regulations issued by the Obama Administration."

Coal vs. Natural Gas: A New Market Reality

While Trump may overturn executive actions or work with Congress to change laws, one law that he will not be able to change is the law of supply and demand economics that has kept natural gas at historic low prices. According to the U.S. Energy Information Administration (EIA), the price of natural gas as an electric generation fuel has been dropping dramatically the past couple of years, leading to its increase in market share and the steady decline in the use of coal. It is hard to imagine that Trump will be able to reverse the laws of economics and promote coal as a power source, even if he undoes the CPP and other regulations, because coal is simply out of the money as a fuel source.

Coal-fired power generation generally costs more than natural gas, and that trend is likely to continue for the foreseeable future, although the EIA's current outlook forecasts that natural gas prices are likely to edge up higher than coal for the short-term, at least through the winter months. For this reason, Trump is unlikely to impact the economic realities facing the coal sector. Furthermore, if Trump implements support for infrastructure spending that might include expanded interstate natural gas pipeline installations, it is expected that expanded hydraulic fracturing (or fracking) and the expanded pipelines will produce an even more abundant supply of natural gas in the long-term and continue to drive down the cost of power generation from natural gas.

For decades, natural gas was the second-most prevalent fuel for electricity generation behind coal, but it became the electric utility and independent power production industry's primary fuel source for the first time in April 2015, the EIA reported. Natural gas-fired generation has surpassed coal-fired generation in most months since then, and generation fueled by natural gas reached record levels this past summer. During the first six months of 2016, natural gas supplied 36 percent of total U.S. electricity generation compared with 31 percent for coal.

However, for the short-term outlook in the upcoming winter months, EIA expects coal to outpace natural gas. Because natural gas is also in demand for thermal heating, that drives up the natural gas cost in many local markets during the winter. Therefore, especially in markets in which generation capacity exceeds electricity load, power plant operators are expected to select the most efficient fuel source – which could be coal over natural gas – but this trend may not hold, especially in the event of another mild winter. At the beginning of 2016, the national average price of natural gas was consistently below the cost of coal delivered to power plants, reaching a low point of about $16 per megawatt-hour (MWh) in March. Coal, on the other hand, has averaged between $21 per MWh and $23 per MWh for the past two years, according to the EIA. Natural gas prices were low earlier this year because of ample fuel supplies and mild winter weather, which also reduced overall electricity demand.

The Trump Administration must identify some strategies to support the coal-fired power plant industry if coal is going to remain competitive beyond the short term, especially in light of environmental regulations such as the coal ash rule, which will continue to be a drag on the coal business. Therefore, it is a safe bet that natural gas-fired generation will continue to outpace demand for coal in the longer term.

Coal Ash

A major area of focus for the U.S. Environmental Protection Agency (EPA) in its regulation of the coal sector in recent years has been in the area of coal ash, also known as coal combustion residuals (CCR), which includes fly ash, bottom ash, boiler slag and flue gas desulfurization materials resulting from coal combustion in the power generation industry (including electric utilities and independent power producers).

After several high-profile coal ash impoundment failures triggered localized environmental impacts and expensive clean-up obligations for the responsible parties, the EPA issued a new regulation on coal ash to establish nationally applicable minimum criteria for the safe disposal of CCR in landfills and surface impoundments. After proceeding with notice and comment rulemaking for more than four years, the EPA Administrator signed the final rule on Dec. 19, 2014, and the rule became effective six months after publication in the Federal Register on April 17, 2015. Thereafter, the EPA Administrator signed a direct final rule on July 26, 2016, that extended certain deadlines for inactive CCR surface impoundments and became effective on Oct. 4, 2016. (Note that because this rule was adopted more than 60 days before Trump will be sworn into office, it is beyond the reach of the Congressional Review Act.)

The CCR regulations regulate CCR impoundments or landfills as non-hazardous solid waste under Subtitle D of the Resource Conservation and Recovery Act. The rule provides a comprehensive regulatory program to address risks posed by groundwater contamination, structural failures of CCR surface impoundments and fugitive dust emissions. The rule requires CCR units that pose unacceptable risk to either retrofit or close. The rule applies to new and existing CCR landfills and surface impoundments, as well as any lateral expansion of such units, and is self-implementing, which means that facilities are required to comply with the requirements without regulatory oversight.

The coal-fired power generation industry views the CCR rule as another EPA attack on coal and yet another federal regulatory mandate that increases the cost and risk presented by the continued operation of coal-fired power generation. Therefore, coal-fired power plant owners and operators are forced to consider this rule as part of the regulatory risk they face when deciding whether to shut down coal-fired generation or continuing to operate. When coal generators face the higher cost of fuel and higher regulatory compliance risks, it becomes harder to justify keeping coal-fired generation operating – even if the Clean Power Plan fails.   

Nuclear Power

Nuclear power generation has long been the backbone of the baseload power generation industry nationwide. However, it has become increasingly clear in recent years – as lower natural gas prices set the effective clearing price for all power plants, not just those that are natural gas-fired – that nuclear power plant operators cannot continue to operate their plants in the competitive wholesale power markets without some form of market support.

In addition, according to the April 2016 U.S. Supreme Court decision Hughes v. Talen Energy Marketing, states run into trouble in these competitive wholesale power markets if they try to provide out-of-market payments to support any specific generator. In the terms of the Supreme Court decision, "States interfere with FERC's authority by disregarding interstate wholesale rates FERC has deemed just and reasonable, even when States exercise their traditional authority over retail rates or, as here, in-state generation."

Therefore, the fundamental law of supply and demand economics is weighing down nuclear power these days in a similar way to that of coal generation, although the stakes are much higher than coal. Nuclear power generating plants take significant effort and resources to ramp up and operate, with refueling costs in the millions, and turning these baseload generators on and off cannot happen quickly. But in competitive wholesale power markets – which include the Northeast, the Midwest and California – natural gas generators are setting the marginal price of power. With prices trending far below nuclear generators' operating costs, the result is that nuclear facilities are losing money.

Again, similar to coal but on a much broader scale, if Trump favors keeping nuclear generators in business or perhaps favors an "all of the above" power generation strategy, the federal government must identify a strategy to assist the ailing nuclear industry.

One state has already started a program designed to support nuclear power, but it's a "blue state." Trump is not expected to endorse New York's energy regulatory approach because it would require him to admit that climate change is a major problem and that supporting nuclear power generation is a part of the solution. On Aug. 1, 2016, the New York Public Service Commission adopted an order implementing a Clean Energy Standard that, among other things, stated that New York's goal is to achieve 50 percent renewable energy by 2030 and reduce greenhouse gas emissions in the state by 40 percent by 2030. Furthermore, the order concluded that allowing upstate nuclear power plants to close would seriously impair the state's ability to achieve the 40 percent greenhouse gas emission reduction standard by 2030. The order implemented a controversial payment mechanism whereby the nuclear generators would sell the "zero emission reduction" attributes, or credits, from the upstate nuclear power generators in amounts equal to the megawatt-hours of electricity that all of the state's load-serving entities sell to end-use customers beginning on April 1, 2017. This mechanism is already being challenged by other market participants that claim the nuclear payments violate the U.S. Supreme Court's holding in Hughes v. Talen Energy Marketing. This litigation is just commencing, but the case illustrates the challenges that states face if they try to assist the nuclear power generation industry in competitive wholesale power markets.

At some point, Trump's energy policy will need to indicate whether nuclear power is important to the future of the nation's power generation industry and, if so, how the federal government can provide meaningful support to this industry.   

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.