Trump Coal Plant Orders Refresh State, Federal Power Struggle

The Trump administration’s moves to reignite the coal industry have states arguing the federal government is messing with energy generation plans that have been in the works for years.

Federal emergency orders for coal plants to stay open in many instances go against plans between states and utilities that factor in plant closures. The Trump administration announced Feb. 11 it would send a collective $175 million to several coal plants to modernize their operations.

Those actions and others taken during President Donald Trump’s second term have left states and utilities—which typically work together on energy generation—scrambling to respond.

“It’s generally been understood that the core of states’ authority is over electricity generation,” said Hannah Wiseman, a law professor at Penn State University’s Institute of Energy and the Environment. The Federal Power Act—the authority the DOE is citing in its orders that permits the agency to step in during energy emergencies—doesn’t say it “can displace” states’ power, she added.

Wiseman said she thinks “the federal government simply assumes” that “it’s implied it can go against state control.”

Several states don’t agree. Colorado and Washington both petitioned the DOE to rehear orders affecting plants in their states, and Michigan, Illinois, and Minnesota all sued over orders to keep a Michigan coal plant along the state’s western coast open.

“The Trump administration is engaging in Soviet-style central planning, driven by ideology rather than the realities of the electric grid, that will drive dirtier air and higher electric rates across our state,” Colorado Energy Office Executive Director Will Toor said in an announcement asking the DOE to reconsider its order. The state said the “order runs counter to Colorado’s orderly and measured process to ensure a stable energy grid.”

Stepping on Toes

States—which often regulate their electricity markets through their public utilities commissions—regularly ask utilities to submit plans that spell out what their energy resource mixtures will be in the future, said Joseph Tomain, a law professor at the University of Cincinnati’s College of Law focused on energy law and regulation. And they want to make sure utilities follow those outlines, he added.

“We have planned for the retirement of this resource for over a decade and have proactively replaced the capacity and energy from new sources,” said Jason Frisbie, general manager and CEO of the Platte River Power Authority, a not-for-profit utility in Colorado that also asked DOE to reconsider. Platte River and Tri-State Generation and Transmission Association, a not-for-profit power co-op that joined the rehearing request with Platte River, said “their owners are the ratepayers who would shoulder 100% of the burden of any unrecovered costs.”

The Trump administration has pushed back on the idea that lifting up the coal sector could be costly. When asked whether the DOE has plans to prevent costs from impacting consumers, Energy Secretary Chris Wright told reporters earlier this month that “keeping coal plants on allows you to meet peak demand and allows you to keep price rises down.”

“They’re not a cost center,” Wright said. “They are a security generator. And they are a cost downward driver.”

Some utilities analysts disagree. Ron Lehr, a lawyer and independent energy consultant who chaired the Colorado Public Utilities Commission from 1984 to 1991, said Colorado has “taken responsibility” for energy reliability and has “good results from the process that we’ve undertaken.”

“What does Secretary Wright know about this? I don’t think he knows very much,” Lehr said. “This is an arcane bit of planning economics that takes place on a regular schedule.”

Cost Questions

The DOE instructed utilities and energy companies to ask the Federal Energy Regulatory Commission, which governs wholesale electricity markets and interstate transmission, for any needed rate changes to carry out its orders. States, however, also have power over electricity rates because their public utilities commissions approve retail rates paid by the average person.

That’s an area where states could challenge orders to keep coal plants open, according Tomain. States hold hearings to consider utilities’ plans and can question an investment a utility is making, he said.

“The utility is going to go, ‘Hey, wait a minute, daddy made me do it,’” Tomain said. “States do have that power to really prevent those rates from being passed to consumers.”

“It’s going to be very interesting to see whether or not states actually exercise their rate-hearing power and deny the inclusion of whatever the local costs are going to be,” he said.

The Trump administration’s Feb. 11 announcement appeared to consider cost concerns. It announced it’s going to direct $175 million in funding to six coal plants in four states—West Virginia, Ohio, North Carolina and Kentucky—"to modernize, retrofit, and extend the useful life of” those facilities.

Expecting More Orders

It remains to be seen whether the administration further extends its 90-day orders for plants to remain open, some of which were issued for the first time in December 2025. The potential for extensions is what’s driving the legal challenges, said Jon Schneider, a partner at Stinson and chair of the firm’s energy regulation practice.

“When the orders were strictly short term, it wasn’t much of incentive for anybody to challenge them, because they were here and gone in the course of a month,” Schneider said.

The DOE ordered Michigan’s J.H. Campbell Power Plant and part of Pennsylvania’s Eddystone Generating Station—which runs on natural gas—to stay open for 90 days starting in May 2025. It issued subsequent orders to keep those plants open in August and November. The November J.H. Campbell order ran through Feb. 17. The DOE didn’t respond to a request for comment on whether it would extend it. The Eddystone order runs through Feb. 24.

“Unless there is some constraint imposed by the courts, I don’t think they’re going to let up,” Schneider added. “I think you’re going to see persistent renewal of these orders.”