April 25, 2026 - Pennsylvania's two largest coal-burning power plants, which were slated to cease operation in less than three years, would remain in service through 2032 under an agreement with the Pennsylvania Department of Environmental Protection.

Instead of shutting down, owners of the Keystone and Conemaugh generating stations in Indiana and Armstrong counties have agreed to make upgrades to reduce ash and heavy metal pollution from the wastewater the plants discharge into western Pennsylvania waterways.

Under a proposed consent decree, the plants’ owners would have until 2028 to complete the upgrades with periodic deadlines for progress. The DEP filed a motion seeking a judge’s approval Tuesday in Indiana County Court of Common Pleas. 

Gov. Josh Shapiro said the deal would ensure reliable and affordable electricity for hundreds of thousands of homes and businesses as the planned development of data centers causes the supply to tighten. 

“I’m an all-of-the-above energy Governor, and by upgrading the environmental controls at the Keystone and Conemaugh Generating Stations to keep them operating for longer, we will protect energy jobs and ensure Pennsylvania generates enough energy to support the regional grid while reducing their impact on our environment,” Shapiro said in a statement.

President Donald Trump also took credit for the deal, saying his administration had delivered a “big win” for the commonwealth.

“The Commerce Department worked with Governor Josh Shapiro, who has now agreed to keep open TWO BEAUTIFUL, CLEAN COAL PLANTS,” Trump said in a social media post, adding that his administration will never allow them to be replaced by wind farms.

State Treasurer Stacey Garrity, who is the GOP nominee to challenge Shapiro’s reelection bid this year, commended Trump for “bringing Josh Shapiro to the table and getting the job done for Pennsylvania families.”

“The deal to keep the Keystone-Conemaugh plant open is another example of President Trump putting Pennsylvania workers and Pennsylvania energy first,” Garrity said in a statement.

Environmental advocates, meanwhile, decried the agreement as a disappointment during Earth Week, saying it would prolong emissions of greenhouse gasses and toxic chemicals far beyond the plants’ planned retirement. 

Opponents of the agreement say it’s also a bailout for the plants’ owners, who changed their minds about shutting down, but are unable to meet a federal deadline for the wastewater improvements.

“Governor Shapiro says he is defending Pennsylvanians’ constitutional right to clean air and water, but this decision contradicts that. Key-Con had years to comply with federal wastewater rules, and now the state is extending the lives of aging coal plants while cutting the lives short of people living nearby,” Alex Bomstein, executive director of the Clean Air Council, said.

Bomstein added the commonwealth should be working to speed the addition of renewable energy projects already planned, “not doubling down on coal, more pollution, and more climate chaos to address an electricity crunch driven in part by the data centers Shapiro’s administration is promoting.”

Keystone and Conemaugh are owned by Key-Con Operating LLC, a consortium of investors including Houston-based Talen Energy and private equity firms. 

Straddling Plumcreek Township, Armstrong County and Armstrong Township, Indiana County, Keystone opened in 1967. Conemaugh in West Wheatfield Township, Indiana County, opened in 1970. Each plant has two generating units and is capable of producing more than 1.7 gigawatts of electricity. Together, they produce about four times more electricity than the undamaged nuclear reactor at Three Mile Island in Dauphin County before it went offline in 2019.

Key-Con announced in 2021 that it planned to cease burning coal at the plants by the end of 2028. The decision was based on the long-term outlook for the wholesale electricity market at the time, the DEP said in a court filing. 

Since then, PJM Interconnection, which manages the grid that serves Pennsylvania and 12 other states plus Washington, D.C., has forecast that peak energy demand will increase by nearly 17% by 2035. Over the last two years, prices in PJM’s capacity auction, where generators bid to supply electricity, have soared, leading to a settlement between PJM and the Shapiro administration capping the price. Despite the cap, some consumers have seen electricity bills spike by up to 20%.

According to the consent decree, Key-Con’s plants have been covered since 2020 by U.S. Environmental Protection Agency (EPA) regulations requiring the “Best Available Technology Economically Achievable” to be in use by the end of 2025 to manage wastewater produced by plants’ anti-air pollution processes. 

These include a chemical process to remove sulfur dioxide, a component in acid rain, from the plants’ smokestack emissions. It also uses water to flush coal ash from the bottom of the boilers where it is burned to produce steam. The wastewater must be treated before it is discharged to the Allegheny River and other waterways.

Because Key-Con had elected to cease burning coal at the plants, it was not required to update the wastewater systems before closing them. But in 2024, the EPA published revisions to its wastewater regulations, including provisions that allowed until 2028 to comply with the wastewater treatment requirements.

David Masur, executive director of PennEnvironment, said Key-Con saw the changes as an opportunity to make money by keeping the plants running amid spiking demand. 

“These plants were slated to close because it didn’t make economic sense to do the upgrades and keep them open,” Masur said.  

Jon Gordon, of the renewable energy industry group Advanced Energy United, noted increased demand in the electricity market has prompted similar decisions across the country by data center developers. Long lead times for crucial components such as turbines and transformers have pushed completion dates for new plants back by years, he said.

Microsoft announced in 2024 that it had entered a $1.6 billion agreement with Constellation Energy in 2024 to restart the Three Mile Island reactor. The plant was slated to come back online in 2027, but that may be pushed back to 2031, as PJM warned Constellation last month of delays reconnecting it to the grid.

Under the Microsoft agreement, all of the electricity generated at Three Mile Island would be purchased by the software giant for use in artificial intelligence data centers. 

The Keystone and Conemaugh plants would supply power to the grid, not to data centers directly, and while that may ease the supply and demand crunch somewhat, Masur said, “It’s a double edged sword.

The plants are responsible for 5% to 10% of all the climate-warming pollution produced in Pennsylvania. And consumers may see little if any relief in their electricity bills given the rising cost of coal as a result of the U.S. and Israeli war with Iran, Masur said, noting that ratepayers would also bear the cost of upgrades.

“As long as you say ‘affordability’ you can make some pretty shortsighted decisions that might not be affordable at the end of the day,” Masur said.