Grid reliability to military bases would be better served by a more competitive procurement process, not a bailout program that is being entertained by the White House, according to an energy policy analysis published Thursday.
Maintaining a reliable flow of power to U.S. military bases has concerned regulators for years. The Energy Policy Act of 2005, signed into law by the Bush administration, sought to prevent blackouts by diversifying the military’s energy sources. However, Department of Defense installations in 2016 were still hit with 701 power outages, with an average cost of $500,000 per day. The rapid closures of uneconomical power plants across the country has only deepened the government’s concerns over grid resilience.
These worries have prompted the Trump administration to consider using emergency federal authority to assist coal and nuclear facilities at risk of closure. The White House’s plan would be to mandate providers purchase electricity from coal and nuclear plants — which have been hit hard in recent years from competitive natural gas — to keep them profitable. (RELATED: A Plan To Save Struggling Coal Plants Is Circulating Around The White House)
However, a free-market think tank argues this is the wrong strategy. A study by American Action Forum determined that military installations are better served, not by a sweeping intervention in civilian energy markets, but by a more direct approach.
“A less costly and far more effective alternative would be competitive procurement for electricity assets on military bases, rather than an implicit subsidy to civilian power plants,” wrote Philip Rossetti, the director of energy at American Action Forum and author of the study. Such an alternative, he argues, would save Americans more money and better protect military bases from power outages.
More specifically, Rossetti suggests U.S. national interests are better served with a policy centered closely to the Strategic Petroleum Reserve (SPR). The SPR, located off the coast of the Gulf of Mexico, is the world’s biggest supply of emergency crude oil. In the event of a crisis, the U.S. government may distribute SPR oil by competitive sale. Presidents will utilize this reserve to offset times of supply disruption — such as when the Libyan civil war caused a drawback in supply.
This approach is better, the study argues, because it is totally separate from civilian energy supplies and is structured with the intention to protect national security.
“Merely using emergency powers to force bailouts of unprofitable civilian power plants does virtually nothing to improve national security while carrying high costs, but the national security argument for improved resilience of military base’s energy consumption is well established,” Rossetti concluded.
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