Colorado Watching Closely After Federal Court Tosses Order to Keep Coal Power Plant Running in Michigan

 

 

September 15, 2026 - An emergency order to keep a Michigan coal-fired power plant running — the same as one blocking the closure of Craig Unit 1 in northwestern Colorado — was struck down Friday by a federal court, which said federal energy regulators overstepped their authority.

The U.S. Court of Appeals in Washington, D.C. ruled that the Trump administration did not have the authority to issue an emergency order to keep J.H Campbell Generating Plant, in West Olive, Michigan, running. 

The same court also has a lawsuit from Colorado state officials, environmental groups  and utilities challenging the U.S. Department of Energy emergency order for the Craig plant.

“Like in the Campbell case, Colorado doesn’t face an actual emergency that the state’s resource planning tools can’t handle,” Margaret Kran-Annexstein, Sierra Club Colorado chapter director, said in a statement.

“And like Campbell, Craig is not needed and should be allowed to retire. The DOE should stop issuing orders requiring Craig’s operation,” Kran-Annexstein said.

The 64-year-old J.H. Campbell Generating Plant was scheduled to close in 2025, but the Trump administration resorted to an emergency order to keep it running.

The DOE issued a 90-day order to keep the coal-fired plant open under section 202(c) of the Federal Power Act and has extended the order every 90 days since then.

That section of the law gives the federal government power to act “during the continuance of a war” or when there is a sudden increase in electricity demand or shortage of electricity or generation.

“Our reading of the text, structure, and history leaves us unpersuaded by DOE’s sweeping conception of its “emergency” authority under section 202(c),” the appeals court said.

A similar 90-day order was issued to Tri-State Generation and Transmission Association on Dec, 30, 2025 — one day before the 45-year-old Craig Unit 1 was scheduled to close.

“The emergency conditions resulting from increasing demand and shortage from accelerated retirement of generation facilities … could lead to the loss of power to homes, and businesses,” the DOE order stated. 

However, the DOE’s interpretation of emergency, the court said in the Michigan decision, could lead to “frequent federal interventions unsupported by the statute” and threaten energy market stability.

Still, the DOE went on to issue six more emergency orders to keep aging coal-filed plants open.

A coalition of environmental groups led by the Sierra Club, and the states of Michigan, Illinois and Minnesota filed a lawsuit challenging the J.H. Campbell order.

The Craig order sparked lawsuits from the Colorado attorney general and a coalition of environmental groups, including the Sierra Club, and a separate challenge by plant operator Tri-State and its co-owners, including Platte River Power Authority and Xcel Energy. 

The utilities argued the unit is not needed and is expensive to maintain. The DOE has continued to extend its emergency order for the plant.

The Colorado lawsuits, which have been consolidated into a single case, are pending before the federal appeals court.

Court: States have managed utility supplies for 100 years

In the Michigan case the appeals court struck down the first emergency order, not the five that followed.

The decision said that while the Federal Power Act gives the federal government the ability to regulate interstate transmission, it denies federal authority over generating assets.

“During nearly a century of state responsibility for sufficient supply of electricity under the FPA, the federal government has rarely used section 202(c) authority outside of wartime,” the court wrote in the Michigan case.

The DOE should only intervene when states, their utilities and regional grid operators are unable or unwilling to respond. In approving Tri-State’s resource plant the Colorado Public Utilities Commission stated that Craig 1 was not needed to meet demand.

Tri-State is reviewing the court decision, Amy Robertson a spokesperson for the association said in an email.

Tri-State and the Platte River Power Authority first challenged the order administratively and then in court arguing that keeping the unit open “requires the operation of an uneconomic resource” and that “members and customers must pay those costs even though neither Tri-State nor Platte River are experiencing these shortages.” 

Tri-State has declined to say how much it is costing to keep Craig Unit 1 open, but in a court filing Xcel Energy, which has a 10% ownership of the unit, said its share of the costs for the first six months of 2026 was $4 million.

Consumer Energy, the operator of J.H. Campell said in financial filings it has cost $259 million to keep the plant open since the first order. The plant is about three times the size of Craig Unit 1.

“The Energy Department’s emergency orders, including at Campbell, prevented blackouts and likely saved hundreds of lives during peak capacity events this past year,” Emily Matthews, a DOE spokesperson, said in a statement.

“The Energy Department’s emergency orders were essential for keeping the lights on during Winter Storm Fern,” Matthews said. The Jan. 26 storm stretched from northern Mexico to the Atlantic coast.

The court ruling said that emergency orders during high-demand, short-term events like storms are appropriate.

DOE could appeal the Michigan ruling to the U.S. Supreme Court.

As for Craig Unit 1, according to data from the U.S. Energy Information Administration, during  the first six months of 2026, while Tri-State kept the plant open, it generated no electricity from January through March, 56,782 megawatt-hours in April and then no electricity in May or June.