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The Trump administration is expected to use a controversial Energy Department report to justify keeping costly fossil-fueled power plants online past their retirement dates. But nine state attorneys general and several clean-energy industry groups are demanding the agency fix the document’s heavily criticized methodology.
The report, which found that the country will face a hundredfold increase in grid blackout risks absent extraordinary federal intervention, was blasted by experts upon its release in July. The DOE’s analysis ignores hundreds of gigawatts of new energy resources likely to come online in the coming years, the vast majority of it solar, batteries, and wind power, and it overstates power plant closures expected over the next five years.
“DOE’s assumptions unreasonably presume that the market, grid operators, and state regulators will take no action in the next five years to address load growth or reliability issues, and that no alternative other than preserving aging coal and gas power plants will ensure grid reliability,” the state attorneys general wrote in their joint request for rehearing filed earlier this month.
The DOE hasn’t yet cited the analysis to support any stay-open orders. But the attorneys general of Arizona, Colorado, Connecticut, Illinois, Maryland, Michigan, Minnesota, New York, and Washington wrote that an April executive order from President Donald Trump and “subsequent statements by DOE make clear that the report will be used to justify Section 202(c) orders going forward.”
Already, before the report was issued, the DOE had used Section 202(c) of the Federal Power Act to order the J.H. Campbell coal plant in Michigan and the Eddystone oil- and gas-burning plant in Pennsylvania to keep running on the eve of their planned closures, at a steep cost to consumers. Forcing more such plants to stay open would drive up electricity costs further and scramble long-running plans from utilities and energy developers to build resources to replace the shuttered facilities.
Doing so would also be illegal, the attorneys general state. “The Report is arbitrary, capricious, contrary to law, and unsupported by substantial evidence in violation of the Administrative Procedure Act and Federal Power Act because it suffers from numerous analytical, mathematical, and empirical flaws.”
The DOE wrote the July report to comply with April’s executive order that seeks to give the agency unilateral authority to force power plants to keep running, even when utilities, state regulators, grid operators, and other experts say it’s safe — and economically prudent — to close them down. The DOE did not respond to Canary Media’s requests for comment.
The report’s flaws were reiterated in a separate rehearing request filed this month by the American Clean Power Association, American Council on Renewable Energy, and Advanced Energy United. The trade groups argue that the DOE’s analysis “fails to take account of (or simply mischaracterizes) major developments that will affect resource adequacy in the next half-decade and beyond,” including “the pace of new resource development, the retirement of existing resources, and the well-established regulatory and market mechanisms that connect these threads.”
In a webinar earlier this month, executives of these trade groups said they also fear that the DOE will use these flawed assumptions to justify ordering fossil-fueled power plants across the country to keep running.
“DOE’s analysis takes a series of outlier assumptions and applies them all in one study as the only future scenario, and the result is that we’re getting predictions of blackouts,” said Caitlin Marquis, managing director at Advanced Energy United. “When it’s applied as directed in the executive order to resource-retention decisions, there will be real-world consequences to those actions.”
Indeed, forcing fossil-fueled plants to stay open could “inflict significant harm on our states,” the attorneys general wrote in their rehearing request. In Colorado and Washington state, coal plants set to close in 2025 could be forced to keep running, despite their closure plans being “thoroughly vetted by state and regional authorities and approved only following an extensive examination of cost considerations and reliability impacts.”
States that are part of regional power markets must still share in the expenses of power plants ordered to stay open, as is the case for the J.H. Campbell plant. Keeping that facility running between late May and the end of June cost $29 million, and the total could surpass $100 million by the expiration of the DOE’s 90-day stay-open order this week. That price tag is being spread across the states that are part of the Midcontinent Independent System Operator’s north and central regions, which include Michigan.
The financial toll could rise dramatically if the DOE uses its authority under Section 202(c) to prevent any fossil-fuel plants nationwide from closing on schedule in the coming years. An analysis from consultancy Grid Strategies found those costs could add up to $3 billion to nearly $6 billion per year by 2028.
This month’s filings aren’t the first challenges to the DOE’s use of Section 202(c) authority.
State regulators and environmental groups filed rehearing requests to the DOE’s stay-open orders in Michigan and Pennsylvania, on the grounds that they violate the agency’s legitimate use of Section 202(c) to deal with near-term emergencies. The DOE did not respond to those requests, which prompted Michigan’s Attorney General Dana Nessel and environmental organizations, including Earthjustice and Sierra Club, to file petitions for review asking the federal D.C. Circuit Court of Appeals to open a case allowing the groups to fight the DOE’s decisions in court. Those petitions for review are pending.
It’s not clear if the agency will respond to these new challenges either, which could prompt lawsuits from the states or the industry. The offices of the nine attorneys general that are seeking a rehearing on the report did not immediately return Canary Media’s requests for comment.
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