Power to the people: Bernie calls for federal takeover of electricity production

Sen. Bernie Sanders has put nationalizing health insurance at the center of his presidential campaign, but his proposal to fight climate change also calls for a government takeover of a fundamental segment of the economy — electricity production.

Sanders has laid out a $16 trillion climate change plan that would transition U.S. electricity generation away from fossil fuels to renewable resources like wind, solar and hydropower by 2030. That’s far faster than any other Democratic candidate's target and sets a pace that rivals like former Vice President Joe Biden say is unrealistic.

And like Sanders' healthcare plan, the green energy push would muscle many of the country's biggest companies out of the business.

A Sanders administration would pour funding into the four existing "power marketing administrations" that are overseen by the Energy Department, as well as the Tennessee Valley Authority and one newly created entity, to vastly expand their solar, wind and geothermal power production. Those organizations currently provide power from hydroelectric dams to 33 states, and would be able to sell the increased green energy to local utilities nationwide — creating a sort of "public option" that would compete with the coal, natural gas and nuclear plants owned by privately owned power generators.

But critics say that government expansion won't sit well in many parts of the country, including some places Democrats will need to defeat President Donald Trump.

“What the Sanders proposal would do is create an 800-pound federally owned power gorilla that would make it very hard for the existing generators to compete,” said Josh Freed, head of energy and climate policy at Third Way, a centrist think tank that opposes the Sanders plan. “I think a plan like this could turn off voters in large parts of the country. It would have challenges in Pennsylvania, Michigan — a lot of the states that are competitive for the election.”

The Sanders campaign has defended its plan as the only one that could reduce greenhouse gas emissions quickly enough to meaningfully combat climate change, and his allies have applauded his desire to take on the utility industry, which for decades resisted climate action.

“This threat is beyond ideology — it's a question of life and death," said Sanders' national policy director Josh Orton. “That's why [Bernie’s] plan is not only the most comprehensive, but is truly the only plan that makes the investments necessary to prevent irreversible damage to the planet.”

Critics say the Sanders plan would dramatically shrink the utility companies like Dominion, Duke Energy and Exelon that have major power-producing businesses. And they worry that saddling the federal utilities with a massive green power mandate would hamper the thriving renewable energy industry and complicate an already slow transition to a low-carbon economy.

"This isn’t health care,” said Pat Wood III, the former chairman of the board at generator Dynegy and Republican head of the Federal Energy Regulatory Commission under President George W. Bush. “We don’t need more cost-effective [clean energy] supplier options. There are plenty of them.”

Representatives of the American Public Power Association and the National Rural Electric Cooperative Association, which represent municipal and customer-owned utilities, declined to comment on the plan. The Edison Electric Institute, which represents privately owned utilities, did not respond to a request.

Sanders plans to use the EPA to set strict carbon dioxide emissions limits — much more stringent than the Obama EPA's rules for power plants that were rolled back by the Trump administration — to force utilities to retire coal and gas plants. To replace that electricity, local utilities could buy renewable energy from the federal utilities, or from clean power plants owned by privately owned generators.

Reshaping the federal utilities would be no simple task: It would require Congress to amend multiple laws authorizing the entities, like the Tennessee Valley Act and DOE Organization Act, likely along with the Clean Air Act to give the EPA stronger authority to regulate carbon. Even if Democrats were to win control of the Senate in November, those plans would still face a tough path in the Senate Energy and Natural Resources Committee, where the top Democrat, West Virginia Sen. Joe Manchin, has been a staunch supporter of the coal and natural gas industries. Manchin's office did not respond to a request for comment.

But like other Sanders energy plans — such as his proposal to reshape federal power regulations — his campaign insists changes to government-owned utilities could be pushed through Congress’s budget reconciliation process, which lawmakers used to enact the Affordable Care Act and requires only a simple majority vote. If that fails, Sanders could use the president's power to declare a national emergency on climate, which would give him broad authority to reshape the utilities but would likely be challenged in court.

Established under President Franklin Roosevelt’s New Deal, the power marketing administrations were created to close a divide in U.S. electricity access that persisted into the 1930s. By forming utilities like the Tennessee Valley Authority and the Bonneville Power Administration, the government financed the electrification of poor, remote communities where private utilities saw little opportunity for profit.

The Sanders plan comes amid an uptick in progressive groups' calls to expand public power. Climate activists from the Democratic Socialists of America have called for San Francisco to take over parts of Pacific Gas and Electric, the investor-owned utility that declared bankruptcy last year as it faced billions in liabilities for multiple deadly California forest fires. In Chicago, activists are pushing the city to split from the nuclear-heavy utility Exelon, and in Maine, Gov. Janet Mills signed a bill last summer directing state regulators to study forming a public power group.

In the past, public power campaigns, including a years'-long push to create a municipal utility in Boulder, Colo., have run aground over disputes about purchasing utility lines and power plants from their owners. But the Sanders' campaign says its proposal differs in a critical way: It would not make the government purchase power plants from existing utilities — it would build new renewable energy to compete with them.

“It is a hybrid plan and it harkens back to the original New Deal where they created these [federal utilities], and they were about lowering the cost of energy for consumers and having cooperative relationships with municipally or publicly owned utilities,” said Johanna Bozuwa, co-manager of the climate and energy program at the progressive think tank The Next System Project. “That creates more incentive and more potential for states, cities and regions that are trying to take over their power supplies. They know they have this option of cheap renewable energy.”

Energy analysts, however, caution that Sanders’s 2030 plan would require a federal infrastructure investment not seen since the construction of the interstate highway system. To get close to Sanders' 100 percent clean energy goal by 2030, researchers estimate the U.S. would need to add about 800 GW of wind and solar resources — about 25 times the amount the federal government expects to be built this year — along with ample amounts of battery storage and transmission. The Sanders camp forecasts that would cost about $2 trillion.

“Our best year for solar and wind — we’d have to multiply that by three and then sustain it for the next decade,” said Sonia Aggarwal, vice president at the analysis firm Energy Innovation, which advises world governments on their climate targets.

While turning the power grid over to 100 percent renewables presents significant technical difficulties, the clean energy deployment is "not out of the question," Aggarwal said. However, Sanders' plan to shut down nuclear power plants will make it “much more difficult.” The nation’s 60 nuclear plants generated more than half of U.S. carbon-free energy last year, but the Sanders campaign says it will phase them out by denying extensions of their operating licenses when they expire.

Many of those nuclear plants have licenses that expire after 2030, but Sanders expects the cheaper solar and wind power to drive most them into retirement. The stability those reactors provide to the power grid would be hard to replace with the variable output of the renewables, said Leah Stokes, assistant professor of political science at the University of California Santa Barbara.

“I feel like his plan does not grapple with the modeling that suggests 100 percent renewables is very expensive and very technically difficult,” Stokes said. “You can get to maybe 80 percent renewables easily, but I don’t think you can get to 100 percent that easily by 2030 … [and] if you compare to a situation where the nuclear energy stays open and you added all those renewables, then you’d have even more clean energy.”

For Sanders allies, the call to scale up renewable energy so quickly is a major reason to support their plan. If the federal government doesn't intervene, they say, the private market won’t deliver the needed wind and solar growth quickly enough to combat climate change.

"We have done this type of scale before," said Bozuwa. "The Rural Electrification Administration, which was largely based on cooperative and public ownership, electrified a massive amount of the country in 10 years and that is the type of scale that we’re talking about here.”

Critics contend that the existing federal utilities may not be up to the task. Today, the Tennessee Valley Authority still generates about half its power from coal and is in the top-ten of carbon emitting U.S. utilities. The four western power marketing administrations get most of their energy from hydropower dams, but many are also skeptical they are ready to undertake a massive renewable energy build-out.

Instead of relying on those agencies, Stokes and Wood said Sanders could achieve the same goal with a national renewable energy standard that would force private utilities to buy renewable energy from private suppliers. In that case, the federal utilities could be used to build only the riskiest projects the private companies won't touch.

“I could see the benefit of having the federal government take on riskier, longer term projects that are needed for grid stability like concentrating solar power projects and pumped hydro,” Stokes said, “which probably is not how they’re thinking about it.”