As U.S. House Passes Coal-Fired Legislation, DOE Orders Another Retiring Coal Plant to Stay Open

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Written by Eric Funderburk for Industrial Info Resources (Sugar Land Texas)

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Summary

On Tuesday, the U.S. House of Representatives passed the Power Plant Reliability Act, which grants FERC broad authority to order coal-fired plants to stay open. Also on Tuesday, the Department of Energy ordered a coal-fired plant in Washington, slated for retirement within weeks, to continue operating.

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Movement in Coal-Fired Power Sector

Tuesday saw some movement in the U.S. coal-fired power sector, with legislation affecting coal-fired power plant closures passing the U.S. House of Representatives, and the U.S. Department of Energy (DOE) ordering a third fossil-fueled power plant slated for retirement (the second coal-fired plant) to continue operating.

H.B. 3632 - The Power Plant Reliability Act

The Republican-proposed Power Plant Reliability Act went up for a vote before the House on Tuesday, passing by 222 to 202. The bill, which must now go before the Senate, gives the U.S. Federal Energy Regulatory Commission (FERC) broad powers to prevent coal-fired power plants from retiring and significantly affects the notice that must be given before a planned retirement.

The DOE currently has the power to keep plants operating under the Federal Power Act, a power that has been enacted sparingly in the past but that has been used multiple times this year in regard to three power plants that were planned to retire.

The bill seemingly would not remove the DOE's power to stop a retirement, while extending that power to FERC, in essence suggesting that more voices can be heard to prevent closures.

Another plank in the bill is perhaps more consequential, requiring power plant owners and operators to submit a notice of retirement for a plant five years before the planned date. During that time, any objection to the planned retirement can be made to FERC, which can then exercise its power to force the plant to continue operating for up to five years in order to prevent power shortages and provide grid stability.

Environmental Exemptions & Operating Costs

There's another aspect to H.B. 3632 that is sure to cause more than a few dissenting voices to come out of the woodwork: If a plant is ordered to stay open by FERC, it no longer will be subject to environmental regulations. This is nominally to prevent legal repercussions to a plant's operator caused by a FERC directive. A swathe of older plants is planned for closure as they present environmental-compliance issues and have likely been harboring opposition for a significant amount of time.

Another significant reason for plant closures is older, endemic inefficiencies bringing higher-than-necessary operating costs. It doesn't require an advanced degree to see that, generally, plants built more recently are more efficient, have lower environmental footprints and demonstrate more streamlined operating costs.

The Environmental Defense Fund in a recent press release noted that a Pennsylvania plant that was forced to remain open by the DOE has racked up $80 million in net losses since its planned retirement date that "are being recovered from households and businesses across 11 states in the Midwest, even though the regional grid had more than enough electric power over that period." That plant's owner, Constellation Energy (Baltimore, Maryland), the leading nuclear power operator in the U.S., had cited uneconomical operations as the primary reason for its planned retirement.

Planned Washington Plant Closure

Environmental reasons were the primary cause tied to the planned retirement of TransAlta Corporation's (Calgary, Alberta) coal-fired plant in Centralia, Washington. On Tuesday, the DOE ordered the plant, which had been scheduled to close at the end of this year, to remain operating for at least another 90 days.

The 730-megawatt (MW) Centralia plant, Washington's last remaining coal-fired plant, began operating in 1971 and for years included an adjacent coal mine that fed the plant. The mine stopped operating in 2006, and while the power plant was planned to quite operations this year, its future wasn't entirely dead.

Earlier this month, TransAlta signed a deal with Puget Sound Energy (Bellevue, Washington) to convert the plant's remaining unit, Unit 2, to burn natural gas. TransAlta is targeting a 2028 startup date, with an agreement to operate the gas-fired unit at least until 2044. John Kousinioris, the chief executive officer of TransAlta, said the move "will lower the emission intensity profile of the facility by approximately 50%." Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can learn more by viewing the project report. IIR's Breaking Energy News (BEN) reported on the Centralia plant on Monday.

Rather than closing at yearend, Unit 2 will continue burning coal for at least another 90 days.

Third Plant to Stay Open

The Centralia plant is the third facility this year that the DOE has ordered to continue operating past a planned retirement date, in addition to subsequent orders to ensure those plants continue to operate.

The DOE's first order came in late May, when it ordered the 1,420-MW J.H. Campbell coal-fired plant in Michigan to continue operating past its planned May 31 retirement date. Subsequent orders from the agency have extended this into February 2026, with the possibility of continued directives. The plant's operator, Consumers Energy (Jackson, Michigan), had planned to eliminate coal power from its portfolio this year.

Days after the Campbell plant order, the DOE ordered the 760-MW Eddystone power plant near Philadelphia, Pennsylvania, to remain open for another 90 days on the day before its planned retirement date of May 31. That plant, which opened in 1974, burns fuel oil and natural gas. The initial order extended the plant's life for 90 days, and subsequent orders in August and November have kept the plant operating since then.

The Centralia, Washington, plant is now the third plant to be forced to remain operating by the DOE. Under Washington's Clean Energy Transformation Act, all utilities were supposed to stop using coal as a fuel source in the state after this year. In addition, the Centralia plant is TransAlta's sole remaining coal plant and its retirement was to have marked the company's complete exit from coal.

Subscribers can learn more by viewing Industrial Info's plant profiles on the Centralia, Eddystone and Campbell plants.

Key Takeaways

• On Tuesday, the U.S. House of Representatives passed the Power Plant Reliability Act, which gives FERC the power to stop power plants from retiring. The bill now goes before the Senate.
• The DOE ordered TransAlta's 730-MW coal-fired plant to continue operating past its planned retirement date, which was set for the end of this year.
• The DOE's move marks the third power plant it has required to remain open.

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