Trump Administration Commands Coal Power Plant Extension Beyond Retirement, Customers in 15 States Obligated for Costs
Feds Keep Aging Coal Plant Alive, Risking Customers' Bills
In a surprising move that could blow hundreds of millions of dollars from consumers' pockets, a coal power plant in Michigan will keep running all summer, ordered by Energy Sec. Chris Wright at the behest of President Donald Trump.
The decision to keep the J.H. Campbell power plant churning past its intended retirement was a shock to Michigan officials, including the head of the state's Public Service Commission, as it was at the tail-end of a multi-year retirement process approved back in 2022.
"The grid operator hadn't asked for this, the utility hadn't asked for this, we as the state hadn't asked for this," said Dan Scripps, chair of the Michigan Public Service Commission. "We certainly didn't have any conversations with the (Energy Department) in advance of the order, or since."
Wright issued the emergency order on May 23, citing concerns of a summer electricity shortage due to a lack of available coal, gas, and nuclear plants able to provide stable baseload power. However, Consumers Energy—the utility that owns the coal plant—already purchased another natural gas-fired power station to carry the load when the coal plant went offline.
Scripps warns that keeping the over-60-year-old plant running, even for 90 days, will be a significant financial hit.
"I can say with a pretty high degree of confidence that we're looking at multiple tens of millions of dollars at the low end," Scripps said. "I think there's a range between there and the high end of getting close to $100 million."
It's uncertain what this will mean for individual electricity bills yet, Scripps added, given the vagueness about final cost.
"For years, American grid operators have warned decommissioning baseload power sources like coal plants could jeopardize power grid systems, raising alarm bells," Energy Department spokesperson Ben Dietderich said in a statement.
Dietderich didn't disclose whether the Energy Department conducted a cost analysis before issuing the emergency order or whether they realized the company already had a plan to maintain baseload power after its closure.
Wright also ordered a Pennsylvania power plant that runs on natural gas and oil open past its May 31 retirement date last week.
Coal is the filthiest fuel still commonly burned for electricity and is now also the most expensive. Although natural gas is a fossil fuel and contributes significantly to global warming, it remains considered a cheaper and less-polluting option, creating 43% of the country's electricity.
Michigan Attorney General Dana Nessel is considering legal action against the federal government, as such an emergency order from the federal government is incredibly rare and usually reserved for the aftermath of extreme weather events or disasters.
Nessel reiterated that keeping the plant open would significantly raise electricity rates, saying, "The whole point of closing this plant down was to save money."
As more electric utilities are retiring their coal plants because of their old age and high operational costs, the Energy Department's order didn't specify exactly how much the Michigan coal plant should run. Instead, it required the utility to "take all necessary measures to ensure that the Campbell Plant is available to operate."
Scripps and energy experts suspect this means the coal plant would likely run continuously at a lower level throughout the summer, or until Wright's order ends. Unlike gas plants, coal plants can't easily be turned on and off with the flip of a switch and need time to ramp up and come online. The Campbell plant has been operating since 1962, making Michigan energy regulators worry that it may not be able to restart once it's powered off.
The utility will have to buy more coal to keep the plant running, with Consumers Energy arranging for new coal shipments to maintain operations.
A recent report from think tank Energy Innovation revealed that the cost of coal-fired power has outpaced inflation in the past few years, collectively costing U.S. consumers $6.2 billion more in 2024 than it would have cost in 2021.
"Even existing coal, fully depreciated and paid off, the cost of coal is now more than solar and storage at this point," said Doug Lewin, an energy expert based in Texas, who authors the Texas Energy and Power Newsletter and hosts the Energy Capital Podcast.
Lewin covers the energy transition in deep red Texas, where power companies are investing heavily in wind, solar, and battery storage. Over the last four years, 92% of the significant amount of new electricity added to the Texas grid has been wind, solar, and storage.
This has resulted in relatively low energy prices and meeting the state's growing power demand from air conditioning, data centers, and big industry.
"All throughout the summer months, you're getting maximum solar output," Lewin said. "It's very well correlated to peak demand. For a place with massive AC load like Texas, it's fantastic."
Texas has also made significant investments in large batteries that keep power flowing to the grid when the sun stops shining and the wind dies down.
Energy Sec. Wright, however, remains skeptical of renewables, stating they are not a reliable replacement for fossil fuels.
"There is simply no physical way that wind, solar, and batteries could replace the myriad uses of natural gas," Wright said at the Houston energy conference CERAWeek in March. "I haven't even mentioned oil or coal yet."
Insights- The North American Electric Reliability Corporation (NERC) identified the Midwest as an "elevated risk" for power outages during high demand periods, primarily due to ongoing retirements of baseload power sources, like coal plants, and the integration of intermittent renewable energy sources.- The emergency order was issued under Section 202(c) of the Federal Power Act, which allows the Secretary of Energy to take action to prevent power disruptions during exceptional circumstances.- Michigan's commitment to 100% "clean energy" by 2040 has led to accelerated coal plant retirements, causing grid resource constraints during peak demand periods. The Michigan coal plant was part of this transition.- Keeping the J.H. Campbell coal plant operational is expected to temporarily manifest as continuous, lower-capacity operation throughout the summer or until Wright's order is lifted. Unlike gas plants, coal plants require more time to start-up and ramp-up.- The Energy Innovation report indicates that the cost of coal-fired power has increased faster than inflation in the last few years, collectively costing US consumers $6.2 billion more in 2024 than it would have cost in 2021.
Environmental science experts may express concern about the potential financial impact of keeping the aging coal plant operational, as the decision could lead to increased environmental-science related costs associated with coal usage and its contribution to global warming. The political implications of the decision could also be questioned, as the emergency order to keep the J.H. Campbell power plant running is a rare move by the federal government and appears to contradict general-news trends towards renewable energy and decreased reliance on fossil fuels.
