DOE delays to fossil plant retirements could cost ratepayers $3bn+

Mandates by the US Department of Energy (DOE) to override aging fossil-fired plant retirements could exceed $3 billion annually, according to an analysis by Grid Strategies, conducted on behalf of Earthjustice and other environmental groups.

To date, DOE has issued two orders mandating the retention of two plants.

Consumers Energy had planned to close the J.H. Campbell coal-fired power station by May 31 until DOE intervened days earlier, saying the plant must remain open at least until late August, because of possible electricity shortfalls in the central US. Eight utility commissions challenged DOE’s emergency order.

Keeping the J.H. Campbell coal-fired plant online under a federal emergency order cost Consumers $29 million between May and June 2025, according to the utility’s latest quarterly filings.

Grid Strategies noted that DOE also ordered the retention of the two-unit Eddystone oil and gas power plant in Pennsylvania, even though its owner had planned to retire the aging plant.

“DOE mandates are overriding cost-minimizing retirement decisions that have been made by state utility regulators and merchant power plant owners based on extensive information regarding the cost, performance, condition and need for each plant,” Grid Strategies said.

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Based on current trends and outreach to plant owners, DOE may attempt to require nearly all large fossil plants scheduled to retire before the end of 2028 to remain in service, the power sector consultant said. The low estimate here is 34,948MW of capacity, and the high estimate is 66,337MW.

Grid Strategies’ analysis uses the cost of recent Reliability Must Run (RMR) contracts as a proxy, estimating an average of $89,315/MW-year, though actual costs from recent DOE orders—such as Campbell’s—suggest this may be a conservative figure.

Under the low estimate, annualised ratepayer costs could exceed $3.1 billion by January 2029 as more plants are forced to stay online past their planned retirement dates.

In the high estimate scenario, applying a conservative 60-year plant age screen, DOE mandates could result in annual ratepayer costs exceeding $5.9 billion by the end of 2028, the analysis suggests.

While exact retirement dates for these age-based units are unknown, Grid Strategies says their geographic distribution is expected to mirror that of scheduled retirements, with state-level costs roughly double those in the low estimate.

We have reached out to DOE for comment and will update this story when we have the latest.

Originally published by Kevin Clark on Power Engineering Factor This