July 20, 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 war­time pro­vi­sion to revive coal as it’s phased out in favor of cheaper, cleaner altern­at­ives.

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.

The fed­eral gov­ern­ment provid­ing incent­ives for 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.

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 car­toon lump of coal wear­ing a miner’s hard hat and a bash­ful smile.

One of the five power plants 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 non­profit groups, argued to over­turn the depart­ment’s dir­ect­ive at the DC Cir­cuit Court of Appeals. The case will have implic­a­tions for the four other coal plants ordered to keep run­ning.

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 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.

Ari­zona is among the states that have shif­ted away from coal to renew­able sources. 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 renew­able energy 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 rein­ing 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 news 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 Gen­er­at­ing Sta­tion evaded the expenses asso­ci­ated with the new emis­sions rule, even while con­tinu­ing to oper­ate. Last April, it was one of 66 coal­burn­ing 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 news 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 people who live near them, emis­sions 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 Ari­zona 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 for co-op 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,” Car­o­lyn Turner, the com­pany’s dir­ector of com­mu­nic­a­tions, said in an email.