July 6, 2026 - Two years ago an Arizona power plant received hundreds of millions of dollars in federal funding to invest in renewable energy and go coal-free by 2028. Now, under a different presidential administration it’s getting more money — this time in support of coal. 

The Apache Generating Station planned to retire coal by the end of next year, but on June 4 it was granted nearly $21 million in exchange for maintaining and updating the coal turbine, which is also capable of running on natural gas.

It isn’t alone. The Department of Energy announced plans to dole out $425 million to 12 existing coal facilities across the country that applied for funding made available under the Defense Production Act. 

At a time when energy experts say the nation should be moving away from coal, President Donald Trump is invoking a war-time provision to revive coal as it’s phased out in favor of cheaper, cleaner alternatives. 

The announcement is the latest in his coal crusade. Since Trump took office last January, his administration has ordered five coal plants to continue operating past their retirement dates, opened 13 million acres of public lands to coal mining, rolled back air quality standards for coal-fired power plants and introduced a new spokesperson for its energy dominance agenda — “Coalie,” a cartoonified lump of coal wearing a miner’s hard hat and a bashful smile. 

Trump said the recent investment will save Americans billions. But experts warn that keeping coal alive could end up costing ratepayers – and the environment — a lot more. 

Coal power plant retirements have been a long time coming, said Amanda Ormond, Executive Director for the Just Energy Transition Center at Arizona State University. 

Over the last decade, coal plants have retired at a higher rate than other kinds of power plants, according to the Energy Information Administration.

Incentivizing them to stay open is like pushing a rock uphill, Ormond said. 

Without continued assistance, utilities won’t be able to afford to keep their coal turbines running, said Ted Kelly, the director and lead counsel of U.S. clean energy for the Environmental Defense Fund. The administration's new federal funding is trying to fill a “gaping wound” of increasing costs. 

Coal, hard cash

Arizona Electric Power Cooperative’s Apache Generating Station is one of three power plants in the state still using coal. Over the last few years, Arizona’s largest utility companies have started moving away from coal-powered generation — much to the president’s chagrin. 

Last spring, Arizona Public Service closed its Cholla coal plant in Navajo County. The decision garnered immediate backlash from state lawmakers and from Trump, who instructed Department of Energy Secretary Chris Wright to save the power plant.

"We're going to have that plant opening and burning the clean coal, beautiful clean coal, in a very short period of time,” the president said last April after signing executive orders keeping a host of other coal plants on life support. Despite the federal pressure, the Cholla plant has remained closed.

Coal generation has grown costly, Kelly said. Since 2020, prices for the fuel have been on the rise, and over the last two decades demand has been on the decline. Coal turbines are some of the oldest in the country — the Apache Generating Station’s is 47 years old — making them costly to maintain.

A decade ago, coal accounted for 38% of power generation in Arizona. Now, it only makes up 8%, according to a 2024 estimate by the Energy Information Administration. Instead, 45% of the state’s power comes from gas and 19% comes from renewables like solar and wind.

“In general, coal plants retire because they aren’t cost-effective compared to the new stuff,” Ormond said.

Remaining open would’ve cost the Cholla plant nearly $2 billion in upgrades and maintenance, according to the Arizona Corporation Commission. It closed in part to avoid lawsuits with the Environmental Protection Agency. 

In 2024, the EPA updated air quality standards for coal and oil-fired power plants under the Clean Air Act, which meant reigning in emissions of harmful heavy metals like mercury by 2027. For some plants, that meant investing in new pollution capture equipment — a cost often more expensive than retiring coal turbines altogether or transitioning them to natural gas. 

In March, the state approved plans for Salt River Project and Tucson Electric Power to convert their coal turbines to gas. In 2023, TEP announced that it would shift away from coal by the end of the decade. The company cited rising fuel costs, mine closures and environmental regulations in a press release last summer. 

Keeping the coal turbines running would’ve taken over $450 million in upgrades to meet EPA guidelines, according to the Arizona Corporation Commission. Converting the turbines from coal to gas will cost $170 million. 

The Apache Generation Station evaded the expenses associated with the new emissions rule, even while continuing to operate. Last April, it was one of 66 coal-burning facilities that applied for and received exemptions from the updated federal air pollution standards.   

The plant’s coal turbine nearly tripled the amount of mercury it emitted from 2024 to 2025 — even though its operating hours decreased, according to EPA data. 

In February, the agency finalized a rollback of the 2024 emissions rule for all oil and coal-fired power plants. 

“The Biden-Harris Administration’s anti-coal regulations sought to regulate out of existence this vital sector of our energy economy. If implemented, these actions would have destroyed reliable American energy,” EPA Administrator Lee Zeldin said in a press release.

The administration's reversal might make coal plants marginally less expensive. But it does so at the cost of the environment, Kelly said. 

“Coal power plants have really severe air quality consequences,” he said. For local communities they can exacerbate asthma, contribute to heart problems and lead to premature deaths. 

The costs of keeping coal plants open

Reviving coal doesn’t just cost utility companies and the environment, in many cases it takes a toll on ratepayers’ wallets. 

When the Arizona Corporation Commission approved TEP’s plans to convert their turbines in March, it noted that the costs associated with keeping them running on coal — $450 million — would’ve been passed onto ratepayers. 

Apart from the nearly $21 million the power co-op is set to receive from the Department of Energy, it will have to match another $32 million in cost-sharing funds.

The funding includes a cost-sharing requirement to make sure the recipients have a stake in the long-term success of the project, a department spokesperson said in an email. Typically, that money comes from power plant owners and operators. 

Arizona Electric Power Co-op told The Republic that it’s in discussions with the department regarding that requirement. The utility said the $21 million in federal funding will be used to improve efficiency and reduce long-term maintenance costs at the coal turbine, which will save money and for AEPCO members and consumers. 

It did not respond to questions on how the cost-matched funds will be raised or if those costs will fall to ratepayers. 

The utility is “evaluating all options,” said Caryolyn Turner, the company’s director of communications in an email. 

Local representatives have praised the department’s announcement. 

"I have long supported an all-of-the-above approach to energy because it is the best way to strengthen our energy security, lower costs, and meet the needs of growing communities,” said U.S. Rep. Juan Ciscomani of Arizona’s 6th Congressional District in a June 4 press release.

But an “all-of-the-above approach” that includes coal doesn’t necessarily amount to affordability for ratepayers. 

“As we’ve seen with these coal plants kept open by the Trump administration, they've really increased electric costs in the area,” Kelly said. 

One of the five power plants that the Department of Energy included in its directive last year has lost $180 million by continuing to operate. The utility that owns that Michigan power plant is looking to residents of 11 states to shoulder that cost. 

In May, Michigan, Minnesota and Illinois, along with nine non-profit groups, argued to overturn the department's directive in a D.C. Circuit Court of Appeals. The case will have implications for the four other coal plants ordered to keep running.

Back-tracking on renewable energy?

Two years ago, Arizona Electric Power Co-op shared big plans for its renewable energy transition.

The utility was granted $485 million in “Empowering Rural America” funds from the U.S. Department of Agriculture under Biden’s Inflation Reduction Act. It planned to use the money to build 800 megawatts in renewable energy projects and be coal-free by 2028. 

Some of those projects have already come to fruition. In April, the Co-op announced the completion of a 295 MW solar field in Cochise. Another 400 MW solar project is also in the works, Turner said in an email. 

But Ormond wonders what the new federal money could mean for the future of coal at the utility. AEPCO did not respond to questions from The Republic about whether the funding could extend the life of the coal turbine past its planned retirement date. 

“AEPCO is committed to fulfilling all grant obligations under its New ERA application, including the commitment to reduce the emissions of its generation portfolio 70% by 2031. AEPCO’s projected 2031 resource mix contains over 60% renewable resources, and includes solar, battery storage, and hydropower generation,” Turner said in an email. 

Other utilities in Arizona are back-tracking on previous clean energy commitments.

Last year, APS pushed its goal to be coal-free by 2031. Now, the company plans to close its remaining Four Corners coal plant in 2038 at the latest, a spokesperson for the utility told The Republic in August. 

In New Mexico, a Navajo mine that supplies coal to the Four Corners plant announced plans during a January meeting to expand and continue operations 110 years in the future — even though the power plant is slated for closure in the next 14.

“We need to be investing in the cleanest, most cost-effective technology,” Ormond said, like solar and wind. 

“Coal is a resource of the past, " she said. “This takes our energy system backwards.”