President Trump on Wednesday ordered the Defense Department to favor coal-fired electricity in its long-term power contracts, extending his administration's efforts to support the coal industry by tapping one of the federal government's largest energy customers. At a White House event, Trump signed an executive order instructing the Pentagon to prioritize "coal-based energy assets," calling coal "essential" to national and economic security, the Washington Post reports. "We're going to be buying a lot of coal through the military," Trump said, calling it less costly and more effective than current sources, though the order does not specify how much money the department will spend or how contracts will change.
Peabody Energy CEO James Grech attended the event, and Peabody shares climbed 4% in extended trading, per CNBC. Trump signed several executive orders last April designed to increase coal production; the effort includes a broader push to keep aging coal plants operating. Trump said his administration will use Energy Department funds to upgrade plants in Kentucky, North Carolina, Ohio, and West Virginia, drawing from a previously announced $625 million pool. Energy Secretary Chris Wright has used emergency authority to halt the planned retirement of five large coal facilities, orders now being contested in court by at least 15 states.
Utility regulators, state attorneys general, and consumer advocates say the directives are raising power costs and locking in more pollution at plants slated to close because they are more expensive than alternatives, per the Post. A Michigan coal complex ordered to stay online is costing $615,000 a day to operate, its owner says. A study by consulting firm Grid Strategies estimated that extending such requirements to other plants scheduled to shut down by 2028 could cost more than $3 billion annually, expenses typically passed on to ratepayers. "Taxpayers will have to pay for whatever DOD is buying," said Rob Gramlich, the firm's president.
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