U.S. Government Facing Pushback Over Coal Support

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land Texas)

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Summary

Utility companies filed petitions against mandates to keep coal-fired plants open. Power-plant operators are focusing more on natural gas and renewables, despite federal pressure.

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Costly to Keep Aging Plants Open

From Colorado to Michigan, utility companies are crying foul after planning to shut down aging coal-fired plants only to be mandated by the federal government to keep them open, ostensibly for grid stability purposes.

Federal estimates show natural gas and renewable resources account for the bulk of the energy on the grid. The U.S. Energy Information Administration (EIA), part of the Department of Energy, said in a January report that natural gas should satisfy about 39% of total U.S. energy demand, with hydropower, solar and wind accounting for around 25%.

U.S. President Donald Trump since his return to office last January has put his political efforts largely behind fossil fuels in his pursuit of global energy dominance. The United States is the world leader in everything from crude oil production to exports of liquefied natural gas (LNG). On Tuesday, the administration announced plans for the second lease sale for the U.S. waters off the Gulf Coast.

There's been pushback, however, against the administration for its support for coal. Xcel Energy and rival utility PacificCorp filed a petition last week that asked the Department of Energy to reconsider a December order mandating that the coal-fired Craig Generation Station in Colorado stay open for at least 90 days.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Plant Database can click here for the Craig plant profile.

Operators had been planning to close the plant since 2016 in order to align with state plans to end coal-fired power generation by 2030. Operators said that continuing to keep the plant open was leading to unnecessary costs and is tantamount to a government seizure.

A similar situation exists in Michigan. Utility company Consumers Energy said the forced life-extension of the J.H. Campbell coal-fired power plant led to a net expense of $80 million, which would trickle down to the consumer.

Subscribers have access to the detailed plant profile.

In a January 20 announcement, coinciding with the one-year anniversary of President Donald Trump's return to office, the Energy Department said it was reversing "dangerous and costly energy subtraction policies" from former President Joe Biden with 19 emergency orders meant to ensure grid stability.

"These emergency orders have been essential in keeping the lights on during periods of extreme weather and periods of peak demand," the department said.

Coal, the Energy Department said recently, provided a stop-gap during the strains on the grid from Winter Storm Fern. But despite the support, it's natural gas that dominates the power sector.

Coal Fading from the Grid

Coal last year accounted for 17% of the energy on the U.S. grid. By next year, federal estimates suggest that would fall to 15%. Spending on decommissioning coal-fired power plants in the United States is in the billions of dollars, data from IIR Energy show.

Duke Energy is spending $600 million to close down parts of the coal operations at its Allen Power station in North Carolina, which saw lingering cold from the latest round of inclement weather. Subscribers can view the project specifics here.

Xcel Energy, which filed the complaint in Colorado, said this week that it joined forces with GE Vernova in a strategic alliance for both natural gas and renewable energy.

The first phase calls for the purchase of five gas turbines and an unspecified number of GE Vernova's wind turbines, which Xcel has described as the "workhorse" of the wind energy sector.

On Thursday, Xcel in its report on the fourth quarter added that it completed the conversion of its Harrington coal plant in Texas to run on natural gas. The company reported total operating revenue increased 14% year-on-year to $3.5 billion. Net income of $561 million represented a 22% increase over the same period in 2024.

By the Numbers

• $80 million to keep a Michigan plant open
• 39% of total U.S. energy demand met by natural gas
• 17% of energy on the grid last year from coal

Key Takeaways

• Forcing coal plants to stay open costs money
• Xcel Energy among those asking for relief
• Trump took emergency action on energy last year

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).