Blog | Appeals Court Overturns DOE’s Efforts to Keep Aging Coal Plant from Retiring

Ruling says DOE can use Federal Power Act 202(c) orders only as an emergency backstop during time-limited events like storms

On Friday, September 11, 2026, a federal appeals court overturned an order from the U.S. Department of Energy that sought to keep the J.H. Campbell Generating Plant, a coal-fired power plant in West Olive, Michigan, from retiring. The court found that Federal Power Act Section 202(c) authorizes DOE to issue orders directing the operation of power plants only as a “last-resort backstop,” not as a means to indefinitely keep plants from retiring or to give preferential treatment to certain types of power generation.^{See footnote 1} The court also affirmed that under the cooperative federalism structure of the Federal Power Act, it is the states, and not the federal government, that “decide which generation resources must be built, expanded, reduced, or shut down”^{See footnote 2}  and that the Act “expressly denies FERC authority to regulate generation facilities directly.”^{See footnote 3}  

Friday’s landmark order by the U.S. Court of Appeals for the District of Columbia Circuit found that DOE’s use of Section 202(c) emergency orders 

1. was inconsistent with the Federal Power Act’s fundamental jurisdictional framework allocating roles between state and federal governments; and

2. conflicts with the FPA’s emergency provision itself. 

Congress created an emergency provision in the Federal Power Act at Section 202(c) as a mechanism for DOE to direct energy facility operators to take short-term, immediate action to ensure the reliability of the electric system during wartime or other extreme conditions.^{See footnote 4}  The D.C. Circuit court explained that Section 202(c) allows such intervention only when there is a “grid-reliability risk that calls for an immediate response by DOE.” In contrast, the retirement of the Campbell plant, which was scheduled to be replaced by other energy resources, had already been subject to several years’ of review before being approved by both the Michigan Public Service Commission and the Midcontinent Independent System Operator. In addition, the court pointed to undisputed facts documenting that state regulators, the regional transmission organization, and utilities all had other mechanisms to address electricity shortages, but these mechanisms had not been deemed necessary. Thus, “the circumstances DOE identified [in Michigan] plainly did not require immediate action by DOE”^{See footnote 5} and therefore “did not meet the definition of an emergency under section 202(c).”^{See footnote 6} 

The court looked to the plain language of the Act to clarify the balance of federal-state jurisdiction, which has been reaffirmed repeatedly in cases like FERC v. Electric Power Supply Association (2016), finding that control of generation facilities falls within a “zone of exclusive state jurisdiction.”^{See footnote 7} Due to “DOE’s misconception of the nature and scope of its emergency authority under section 202(c),”^{See footnote 8}  and the fact that “the circumstances identified by DOE do not amount to a section 202(c) emergency,” the court vacated DOE’s 202(c) order for the Michigan plant.^{See footnote 9} 

Last week’s court decision is likely to influence pending judicial and administrative proceedings related to other 202(c) orders affecting power plants across the country. These include DOE orders halting planned retirements at the Craig Generating Station in Colorado, the Eddystone Generating Station in Pennsylvania, the TransAlta Centralia Plant in Washington State, the Schahfer and F.B. Culley Generating Stations in Indiana, and the Stanton Energy Center in Florida. In separate pending challenges also brought before the D.C. Circuit, the court is likely to find those orders faulty on similar grounds as it found here. 

Following the September 11 decision, DOE can continue to use 202(c) orders as emergency backstops to protect the electric system during time-limited grid contingencies like hurricanes and winter storms. In addition, DOE can pursue appeal, though the Supreme Court has the discretion to either accept or reject a petition for review. The question moving forward is whether the ruling against the administration’s move to keep the Campbell plant open will cause DOE to align future 202(c) orders more closely with the emergency authorities granted to it by the Federal Power Act. To date, the 202(c) orders likely to be affected by this ruling have caused ratepayers to incur hundreds of millions of dollars of avoidable expenses, with the magnitude of those costs widely expected to exceed one billion dollars in the near future if the orders persist. The orders have also resulted in increased air emissions, including carbon dioxide, sulfur dioxide, nitrogen oxide, and fine particulate emissions that are linked to early death, premature birth, and other harmful impacts.