Legal & Regulatory

Trump Budget Backs Nuclear, Coal; Cuts Funding for Renewables

The Trump administration’s fiscal year 2019 budget request released February 12 asks for more money to support fossil fuel-based power systems, but seeks funding below current levels for other energy initiatives, including renewable energy and energy efficiency.

The energy funding is part of a $4.4 trillion budget that features large increases in military spending, along with deep cuts to several domestic programs and entitlements, including Medicare, Medicaid, food stamps, and Social Security disability payments. Analysts immediately said it has little chance of being enacted by Congress as written, in part because of fears of what the proposal would add to the federal deficit over the next decade. A New York Times analysis said the proposed budget would add $984 billion to the federal deficit next year, and add about $7 trillion to the federal deficit over the next 10 years.

The proposal, Trump’s second since taking office in January 2017, is similar in many ways to his administration’s proposed 2018 fiscal year budget, which was rejected by Congress. Current funding levels were set two years ago by the Obama administration’s final budget for fiscal year 2017. The federal government’s fiscal year 2019 will begin on October 1 of this year, and conclude on September 30, 2019.

The new budget proposal requests a total of $30.6 billion for the U.S. Department of Energy (DOE), about half of which is designated for the National Nuclear Security Administration (NNSA), the agency “responsible for enhancing national security through the military application of nuclear science,” according to its website.

According to a fact sheet from the DOE, the budget asks for $502 million for fossil energy research and development (R&D), $81 million more than the current level in the previously enacted budget from 2017. The DOE said the money would support “cutting-edge, early stage R&D to improve the reliability and efficiency of advanced fossil-based power systems.” That includes carbon capture and sequestration projects, which have bipartisan support in Congress.

The budget also requests $757 million to support nuclear energy, though that is $259 million below current funding levels. The money would support “early stage R&D, prioritizing support for advanced manufacturing methods, instrumentation and reactor technologies,” and includes $54 million for advanced small modular reactor R&D.

The budget notes a $1.3 billion cut in funding levels for renewable energy and energy efficiency measures, a 65% drop from the previous budget but less than the 72% cut that renewable energy advocates feared when documents related to the budget leaked out two weeks ago.

“The President’s budget request supports the Department’s efforts to enhance today’s energy security while also making strategic investments for tomorrow,” said Energy Secretary Rick Perry in a statement. “This proposal will empower DOE to achieve our missions efficiently and effectively while being respectful to the American taxpayer.

“In order to fulfill the President’s long-term goal of energy dominance we are prioritizing the acceleration of transformative early-stage research and development, relying on our world-class National Labs. This will advance everything from new clean energy technologies to Supercomputing. The budget also bolsters DOE’s national security responsibilities in Nuclear Security and Cybersecurity by calling for increased funding to modernize our nuclear security enterprise and strengthen the cybersecurity of our energy infrastructure. These two areas are critical to America’s long-term national security.”

The budget request also earmarks $120 million for the Yucca Mountain nuclear waste storage program, along with an Interim Storage Program. The administration has said it wants to restart the Nuclear Regulatory Commission’s (NRC’s) licensing activities for the Yucca Mountain nuclear waste storage site in Nevada, and establish a “robust” interim waste storage program that would be able to accept spent nuclear fuel sooner, according to Perry.

Meanwhile, the NRC, in its own budget proposal to Congress, on Monday requested “$474.8 million for nuclear reactor safety, $183.7 million for nuclear materials and waste safety, which includes $48 million to support activities for the proposed Yucca Mountain deep geological repository for spent fuel and other high-level radioactive waste, and $299.6 million for corporate support.” Because the NRC recovers about 90% of its budget from licensee fees, its net appropriation request is about $155 million.

Critics of Trump’s budget plan were quick to point out it also proposes a 34% cut—some $2.8 billion—in funding to the Environmental Protection Agency (EPA). It also cuts the EPA’s Office of Science of Technology budget by more than one-third, to $489 million from its current $762 million. The proposal also eliminates nearly all of the agency’s programs related to climate change. EPA Administrator Scott Pruitt, who leads the agency despite being a vocal critic of the group when he served as Oklahoma’s attorney general, has questioned the science behind climate change.

Fred Krupp, president of the Environmental Defense Fund (EDF), in a statement emailed to POWER said, “For the second year in a row, President Trump has proposed devastating cuts to EPA, despite the fact that its budget in real terms has been cut by more than half over the last four decades. The direct result of these reckless cuts will be more asthma attacks for our kids, more cancer and diabetes, and thousand[s] more deaths from pollution. EPA Administrator Scott Pruitt claims to want a cleaner environment, but his actions—and this budget—prove the opposite. You can’t clean the air while slashing funding for air pollution monitoring.”

There also was immediate criticism of the budget’s plan to sell and privatize power transmission assets, including those held by the Tennessee Valley Authority (TVA) and three Power Marketing Administrations (PMAs): Bonneville Power Administration (BPA), Southwestern Power Administration, and Western Area Power Administration (WAPA). USA Today reported that selling those assets could bring the federal government $9.4 billion.

The PMAs provide electricity from not-for-profit public power groups, rural cooperatives, and tribal utilities, and charge consumers cost-based rates. The PMAs by law are required to set rates to cover several costs, including generation and transmission costs, and they repay the federal government’s investment in their hydropower facilities, which are repaid with interest. PMA hydropower revenues also typically repay dam construction and maintenance costs assigned to other purposes, such as flood control, navigation, recreation, fish and wildlife, and irrigation. The utilities and their ratepayers bear those costs.

The budget request includes $77 million for the PMAs, $6 million less than the current funding level, and seeks to sell PMA transmission assets. The budget also would repeal the $3.25 billion WAPA emergency borrowing authority, and “would permit consideration of comparable utilities’ rates when setting prices.”

The American Public Power Association in a statement said it “is disappointed [the budget request] proposes to divest the transmission assets,” and said it “will adamantly oppose any effort by the federal government to privatize TVA and PMA assets that have been paid for by electricity customers. The Association is also disappointed to see that the FY 2019 budget request proposes to increase PMA rates by changing the current cost-based rate structure.”

The BPA, which like many power generators has struggled during a period of low wholesale power prices, in late January unveiled a strategic plan that it hopes will help it remain commercially viable.

Though many renewable energy advocates remain opposed to the president’s stance on clean energy, the American Wind Energy Association (AWEA) said it was encouraged by Trump’s plan, at least with regard to its $200 billion investment in U.S. transportation and electricity transmission infrastructure over the next decade.

“We see significant promise in President Trump’s plan,” said Amy Farrell, senior vice president of government and public affairs for AWEA. “With 99 percent of American wind farms built in rural areas, an investment in transmission infrastructure boosts rural economies while improving resilience and reliability, delivering low cost power to consumers and strengthening U.S. energy dominance.”

Said Farrell: “If Congress produces a balanced infrastructure bill that streamlines transmission siting and permitting, the President’s pen could unleash new energy resources and tens of billions of dollars in consumer savings each year while also making our grid more resilient to threats.”


Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine)

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