D.C. Circuit Vacates Order Keeping Michigan Coal Plant Available

A unanimous federal appeals court has vacated the Energy Department’s order requiring Consumers Energy to keep Michigan’s J.H. Campbell coal plant available, ruling that DOE exceeded the emergency authority Congress gave it under the Federal Power Act.

In an opinion issued September 11, 2026, the U.S. Court of Appeals for the D.C. Circuit granted petitions for review and vacated the specific order covering Campbell. The decision strengthens the role of state regulators and regional grid planners in deciding whether power plants retire, while leaving unresolved questions about costs, future emergency orders and a possible appeal.

What the court decided

The case centered on Section 202(c) of the Federal Power Act, a rarely used provision that allows DOE to direct temporary action during an electricity-supply emergency. The three-judge panel said the authority is a narrow, last-resort power aimed at an identified risk of a substantial supply shortfall requiring immediate federal action.

The court rejected DOE’s broader interpretation, which relied on longer-term reliability concerns to justify keeping Campbell available. The panel said those concerns belong in ordinary state and regional planning processes rather than in an emergency directive from Washington.

The opinion also warned that DOE’s theory could allow the department to select preferred power sources and bypass state reliability procedures. States retain primary authority over generation planning, while the Midcontinent Independent System Operator, or MISO, supports regional resource-adequacy planning.

Why Campbell was at the center of the case

J.H. Campbell is a 1,420-megawatt coal plant in West Olive, Michigan. Consumers Energy had scheduled it to retire on May 31, 2025, after Michigan regulators and MISO approved a closure-and-replacement plan.

On August 14, 2026, DOE issued the challenged order directing MISO and Consumers Energy to keep Campbell available from August 17 through November 14. The order also required economic dispatch, meaning the plant was to be operated in a way intended to minimize costs for ratepayers.

The appeals court vacated that order. The opinion says the order under review had already expired by the time of the decision. The ruling therefore does not establish that Campbell immediately shut down, and it does not invalidate every DOE emergency order involving other power plants.

Costs remain unresolved

Consumers Energy reported in a Securities and Exchange Commission filing that the net financial impact of complying with emergency orders involving Campbell was $259 million through June 30, 2026, after applying $239 million in MISO revenues. The company also said it expected to incur up to $4 million in retention costs during each 90-day emergency-order period.

Those are company-reported figures, not a final amount owed by ratepayers. Consumers has sought recovery and allocation of costs through proceedings involving the Federal Energy Regulatory Commission, and related tariff-compliance and recovery matters remain unresolved. The appeals court’s ruling does not guarantee lower electricity prices or determine who ultimately bears the expense.

What happens next

DOE defended its action by arguing that keeping coal-fired generation available supported regional reliability. Those claims came from the agency and were not adopted as findings by the court.

Independent reporting has identified the possibility of further review, but no appeal was resolved by the September 11 decision. Any future DOE emergency order involving Campbell or another fossil-fuel plant would have to be evaluated separately under the court’s interpretation of Section 202(c).

For consumers, the immediate result is a legal limit on DOE’s ability to use the emergency provision to delay a planned retirement. The next developments to watch are any request for further review, new emergency directives and FERC decisions on how Campbell-related costs may be recovered or allocated.

Sources

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