Is Craig coal plant part of a five-alarm fire?

Case being heard in Washington D.C. about federal government’s declared emergency may have implications about delayed retirement of Craig unit

by Allen Best

This morning the U.S. Court of Appeals in Washington D.C. will hear opening arguments about what constitutes an emergency in electrical generation.

A coal plant in Michigan is the subject of this specific case. Outcome of this case may have large implications for a coal-burning unit in northwestern Colorado.

“The United States is facing a national energy emergency,” said attorneys for the U.S. Departement of Energy in a March 17 filing with the Court of Appeals. “In fact, the power grids in this country are facing a ‘five-alarm’ fire.”

The federal agency cited rapid growth in demand caused by vehicle electrification, the “sudden” proliferation of artificial-intelligence and other data centers, and the “reshoring of domestic industry.” From 2005 to 2020, he said, demand had grown an average 0.1% a year.

Environmental groups represented by Earthjustice describe something else in play: “an unprecedented power grab” by the Department of Energy that has “torpedoed years of planning” by states, utilities, grid operators and the Federal Energy Regulatory Commission, or FERC.

Electrical generation and operation of the grid is generally governed by states and in some cases by FERC. Section 202(c) of the Federal Power Act, a law passed by Congress in 1935 and amended twice since then, gives the Department of Energy authority to intrude into the electrical sector. What those circumstances are is in dispute.

The 202(c) section of the law says the Department of Energy can use its authority when it “determines that an emergency exists by reason of a sudden increase in the demand for electric energy, or a shortage of electric energy or of facilities for the generation or transmission of electric energy, or of fuel or water for generating facilities, or other causes.”

During the 20^th century, presidential administrations used this emergency authority 29 times. Of them, 22 were during World War II. In this century, presidential administrations have picked up the pace. Most of the emergencies cited were hurricanes, winter storms, or heat waves but also transmission constraints.

Now comes the Trump administration. In less than a year it has cited 202(c) emergencies at least 13 times to keep six fossil fuel plants operating. In doing so, it has employed a more expansive definition of “emergency” than was commonly used before. The justices in Washington D.C. must decide whether the Department of Energy has overstepped.

President Donald Trump’s embrace of the fossil fuel sector was evident in two executive orders that he issued just hours after his inauguration in January 2025. First was Executive Order 14154, “Unleashing American Energy.” Among other provisions, it revoked six executive orders issued by former President Joe Biden that had the word “climate” in their title.

Most pertinent to the coal plants was Trump’s Executive Order 14156, “Declaring a National Energy Emergency.” It said that “policies of the previous administration have driven our Nation into a national emergency, where a precariously inadequate and intermittent energy supply, and an increasingly unreliable grid, require swift and decisive action.”

In late May 2025, Energy Secretary Chris Wright issued two orders citing 202(c). One of them was for the 1,450-megawatt J.W. Campbell coal plant along the shore of Lake Michigan. Consumers Energy, the utility that owns it, had announced plans several years before to retire the plant.

A week before the plant’s scheduled retirement, Wright issued an order for the plant to remain open because of an “emergency” in the Midwest. Wright’s order noted a report that the electric grid operator in the northern Midwest had been reported having an elevated risk of operating reserve shortfalls going into summer.

202(c) allows 90-day orders, and Wright has renewed the orders every 90 days since then.

Orders for Colorado

In Colorado, Wright issued another order in December 2025. This one was for Craig No. 1, a 427-megawatt generating unit in northwestern Colorado. Tri-State Generation and Transmission Association operates the plant and is part owner, along with two other Colorado utilities, Xcel Energy and Platte River Power Authority, and two other utilities from other states.

Wright’s order that the plant remain available for electrical production was issued on the evening of Dec. 30, a day before the unit’s planned New Year’s Eve retirement. That retirement had been planned since 2016, originally because of concerns about the pollution it produced in violation of the Clean Air Act. Economics later provided a secondary reason to retire it.

The emergency cited this time involved energy variability in Colorado but other states extending to Washington and Oregon. The order also noted the retirement of coal plants and projected demand growth of 8.5% during the next decade.

The unit had generally performed well since 1980, but all coal plants break down from time to time. Since 2019, Tri-State and its co-owners invested in maintenance sufficient only to get the plant to the end of 2025. The plant had broken down 11 days before the order arrived.

By late-January, Tri-State had the unit able to produce electricity again. And in late March, Wright issued another 90-day order, this time delegating authority to the Southwest Power Pool to order the unit to resume production if it saw fit. SPP had launched its regional transmission organization in Colorado and other parts of the Western grid on April 1. The unit did produce power for about two weeks upon the orders of SPP.

If precedent from Michigan is served, Wright will issue another 90-day emergency order later this month.

The arguments in Michigan and in Colorado in most cases parallel each other.

Consumer Energy, operator of the Michigan plant, does not challenge the legality of the orders, although the utility does estimate its costs for keeping the plant open at $180 million through March. It wants to be compensated. Xcel, with a 9% ownership in the Craig unit, similarly does not challenge the legality but has cited costs it has incurred of $100,000.

Tri-State and Platte River have not shared their costs, but in a filing submitted to the Department of Energy on April 29, both utilities contest the legitimacy of the Wright’s emergency-based order. Their argument is shared and amplified by filings also submitted on April 29 by Colorado’s attorney general and by a consortium of environmental groups led by Earthjustice.

Comanche 3 is part of story

This gets a bit complicated. Wright — the founder and former CEO of Denver-based Liberty Energy, an oil field services company — had cited reports by two organizations that reserve margins in the region would fall below acceptable levels by the summer of 2034.

Wright also noted the decline of coal from 45% of electrical generation since 2019 to 25% this year, mostly replaced by “weather-dependent resources,” i.e solar and wind.

In his order, Wright cited supply chain issues in adding new generating capacity and noted that the variability of solar and wind, sources for 90% of new generation, are year-round concerns. He also cited concerns voiced by two Colorado PUC commissioners earlier in 2026 about the adequacy of Xcel’s electricity supplies going into summer 2026.

Again, though, an irony must be noted. Xcel’s problem was created by the undependability of one of its coal plants, Comanche 3. The coal-burning unit at Pueblo broke — again — last August. Xcel now says it will be operating again by mid-July.

As for the energy shortages, Tri-State and Platte River insist they are “not likely to occur, if ever, until 2034, more than seven years, or thirty-one 90-day section 202(c) renewal cycles in the future. That emergency, should it ever come to pass, cannot be solved by requiring that Craig Unit 1, a more than 45-year-old coal plant, continue operating today.”

The bold-face and italics are those used by the two utilities in their request to the Department of Energy to rethink its approach. Wright’s order, they say, constitutes “both a physical and regulatory taking.”

Tri-State, in its filings with the Colorado Public Utilities Commission, has said it is confident of having enough electricity until 2034. Platte River also feels confident of its resource adequacy through this decade.

Part of this equation, they argue, is the cost of coal. In planning the retirement of its units, Tri-State had stockpiled enough coal before closing its coal mine south of Craig in October 2025. Now, it will have to go buy coal elsewhere, presumably at greater expense.

The two utilities say that the Department of Energy has violated the Fifth Amendment, which provides that “private property (shall not) be taken for public use, without just compensation.”

Part of this equation, they argue, is the cost of coal. Tri-State — and the environmental groups —present another argument. They say that a solar farm near the coal mine south of Craig was brought online with the idea it could use transmission capacity previously used for electricity from the coal-burning unit. This transmission line may not have enough room for both the electricity from Craig No.1. and a new 145-megawatt Axial Basin solar project.

What constitutes an emergency? In this case, Tri-State and Platte River share a common argument with the environmental groups and the state of Colorado. They’re planning for 2034 now and they don’t need the federal government’s help.

Had Congress wanted the Section 202(c) power to be expansive, to apply to longer-term planning, it could have omitted the “emergency” qualifier. The law spoke to immediacy.

“Replacing dirty, expensive and unreliable plants with modern technology is not an emergency,” the filing says. It is instead, a result of market forces and prudent planning,” says Sierra Club, 350 Colorado and others represented by Earthjustice.

They also point out that Wright’s orders for the coal unit have failed to identify the scale of the so-called “new and unexpected” demand during this time of emergency.

Then there is the pollution. That was the initial cause of Craig No. 1’s planned 2025 retirement. They say that based on 2025 activity, Craig could be expected to generate one billion pounds of carbon dioxide, more than one million pounds of nitrogen oxides and hundreds of thousands of pounds of sulfur dioxide.

Models, they say, estimate those emissions causing four premature deaths annually while also increasing the likelihood of emergency room visits, heart attacks, and asthma attacks.

In using 202(c), the Department of Energy is shielded from normal environmental considerations.

While Tri-State has provided no estimated cost of running the plant, the environmental groups cited a report by Grid Strategies prepared for the Sierra Club that it cost Tri-State nearly $84 million per year to operate the unit annually from 2022 through 2024. Tri-State said the plant ran at half-capacity during those years.

An emergency?

But again, what constitutes an emergency?

In the Michigan case being heard today, Wright’s legal team is arguing that the Federal Power Act does not limit emergencies to cases of “unexpected” or “imminent” circumstances.

“An energy emergency can require immediate action. Even if there is no sudden, imminent, or unexpected electrical shortfall,” the agency’s March 17 filing with the court said.

The Department of Energy team offers an analogy: Engineers identify a structural flaw in a bridge and say it will collapse within five years if it continues to bear heavy trucks. The collapse is not sudden or imminent, nor is the emergency unexpected. “But it’s folly to suggest immediate action is not required.”

Ah, say the environmental groups (and perhaps the state of Michigan response, which we did not see), the Department of Energy makes an erroneous assumption:

“The record shows no real risk of looming concerns going unaddressed. Non-emergency responses can and do resolve far-off problems without the need for emergency command-and-control intervention.”

“The mere fact that a resource assessment indicates the need for new resources several years ahead of time is not evidence of an energy emergency,” says a filing submitted to the Department of Energy on April 29 by the Sierra Club, Vote Solar, 350 Colorado and other organizations. “Instead, this is a feature of utility resource planning, which exists in part so that utilities can procure new resources to meet any increase in demand.”

In other words, butt out, federal government. We can take care of this ourselves.

Colorado Attorney General Phil Weiser had much the same argument: “Federal intrusion in this traditional sphere of state control is permitted only in a true emergency.”