Republicans rightly criticized the $500 million loan guarantee to failed solar energy company Solyndra under the Obama administration, but now the current administration is preparing an energy industry bailout that will dwarf the size of that mistake. If this bailout goes forward, taxpayers will be on the hook for billions of dollars for failing coal and nuclear power plants. The Solyndra failure was a textbook example of the pitfalls that exist when the federal government tries to pick winners and losers in the energy industry. The Trump administration seems to not have learned the lesson, as a number of financially troubled and outdated plants are struggling as energy generation becomes more efficient.

Some of the companies that own these facilities are looking for government handouts to stay afloat and the DOE appears to be willing to oblige. A bailout proposal has been drafted that would dramatically increase the role of the federal government in energy markets and send a staggering amount of resources to a few chosen private companies. Estimates of the proposed bailout peg the cost to taxpayers at somewhere between $20 billion and $35 billion. The proposal would involve direct purchases of energy from approved power plants and create a strategic electric generation reserve, and the direct purchases would be used to prop up several failing coal and nuclear plants. But helping keep these plants operational will not help consumers, according to PJM Interconnection, which has stated that there is “no immediate threat to system reliability from plant retirements.”

Energy Secretary Perry has long been a champion of an “all of the above” energy strategy that is rooted in free market principles, yet the draft bailout proposal is a major departure from a market approach.  A coalition of free market groups warned President Trump that a “bailout would cost taxpayers billions of dollars” and “would represent an inappropriate government intervention into energy markets.” In a free market, outdated companies and technologies are routinely replaced by newer and more efficient competitors, which is exactly what is happening in the energy sector right now. The biggest threat to clean and affordable energy is heavy-handed federal intervention. When this intervention comes with a $35 billion price tag taxpayers should be outraged.