Utility regulators from MISO states including Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, and Wisconsin made a similar argument in their rehearing request to the DOE. “This expansive use of emergency powers sets a troubling precedent, enabling intervention in routine, state-approved planning decisions without an actual crisis,” they wrote. “Such preemptive action risks undermining the credibility of future emergency orders, distorting market signals, and eroding the statutory balance between federal and state authority.”
Dan Scripps, chair of the Michigan Public Service Commission, highlighted the years of work that went into enabling the J.H. Campbell plant to safely close, and the hundreds of millions of dollars that replacing it with fossil gas, solar, and battery resources would save.
“For DOE to substitute its judgment of what’s necessary for the work that’s done by the states and the regional grid operators is something that a large number of states of different political makeups find most troubling,” he said.
A double whammy on costs for utility customers
Forcing aging and expensive power plants to stay open past their long-planned retirement dates also threatens to drive up costs for utility customers at a time when energy prices are already set to rise due to GOP policies. Think tank Energy Innovation forecasts the megabill passed by congressional Republicans last week will lead to a 25% increase in wholesale electricity prices by 2030, as cuts to tax credits stifle investment in solar, wind, and battery projects and force power grids to rely on older, costlier resources.
This week’s DOE report “is another attempt to push the false narrative that our country’s energy future depends upon decades-old coal- and gas-plants, rather than clean renewables,” Greg Wannier, senior attorney at the Sierra Club, said in a statement. “The only energy crisis faced by the American public is the catastrophic increase in costs that the Trump Administration is forcing on the country’s ratepayers.”
Coal has fallen from nearly half U.S. generation capacity in 2011 to just 15% last year, and more than 120 U.S. coal plants are expected to close over the next five years. Coal industry groups and many Republicans blame state climate regulations for that trend. But energy experts agree that the primary driver is that coal plants are unable to provide power at prices that can compete with fossil gas or renewables.
Aging power plants like J.H. Campbell and Eddystone, which were built roughly 60 years ago, are among the most expensive to run — one of the main reasons why those two were both slated for retirement. Forcing them to restart and stay open for three months on the eve of their planned closures involves additional costs to secure new fuel contracts, undertake deferred maintenance, and rehire workers.
Utility customers in the Midwest and mid-Atlantic grid regions those plants are connected to will now bear all of those costs. While the total dollar amount has yet to be calculated, it could run into the tens of millions for each plant, or as much as $100 million for J.H. Campbell, Scripps told reporters in June.
Under its Section 202(c) authority, the DOE doesn’t have to deal with the costs its emergency orders incur, said Clara Summers, campaign manager for the Citizens Utility Board, an Illinois-based utility customer watchdog group. Instead, it gets to delegate the method of recovering those expenses to grid operators and regulators.
But the DOE has failed to show that keeping those plants open will benefit customers, which puts those entities in a bind.
“There is a standard in ratemaking that costs should be prudently incurred,” Summers said. “Since these costs are manufactured emergencies and are not prudently incurred, they are not just and reasonable.”
That’s the argument that environmental and consumer watchdog groups have made in filings with the Federal Energy Regulatory Commission, the agency tasked with overseeing the U.S. power grid. The groups have asked FERC to reject plans to recover costs from DOE’s J.H. Campbell and Eddystone orders on the grounds that the DOE has failed to show how keeping the plants open will benefit consumers.
“What’s especially frustrating about that is that we already have capacity markets that are there to make sure that we have enough electricity, and consumers already pay for that,” Summers said. Those costs to utility customers are rising dramatically in PJM, where years of backlogged interconnection processes have prevented new solar, wind, and battery projects from coming online to help replace power plants being closed. MISO also saw prices spike in its most recent capacity auction.
“The whole function of those markets is to ensure we have enough electricity — and those markets procure enough electricity,” Summers said. “This is something PJM agrees with, that MISO agrees with, that NERC agrees with.”
The DOE has 30 days from when the rehearing requests were filed to open a review of its stay-open orders, Reiser said. If the DOE doesn’t issue an order within that time, “it basically opens up the option for us to go to court.”
The DOE has never used its Section 202(c) authority in this way before, which means it has never been challenged in court on the issues at hand, Reiser said.
But “the fact that there are related executive orders kind of directing the Department of Energy to do these things doesn’t change the basic standards of how our legal system works and how courts interpret statutes,” she added. “No matter the reasoning, they still have to comply with the law.”
