A US appeals court on Friday vacated a Department of Energy order requiring a Michigan coal-fired power plant to remain open, ruling that the agency had exceeded its emergency authority under federal law.
The US Court of Appeals for the District of Columbia Circuit said the DOE could invoke Section 202(c) of the Federal Power Act only in limited circumstances where an electricity shortage posed an acute threat to power supplies that could not be addressed in time through state or regional planning.
The case involved Consumers Energy's J.H. Campbell Generating Plant, a decades-old coal facility that the Michigan utility had planned to retire and replace with newer energy resources.
The Michigan Public Service Commission had approved Consumers Energy's integrated resource plan after a contested proceeding, finding that the replacement resources would improve resource adequacy while supporting affordability and environmental goals. The Michigan Court of Appeals later upheld that decision.
The Midcontinent Independent System Operator also determined that the planned retirement would not threaten the reliability of the regional power grid.
Consumers Energy had documented sufficient capacity to meet projected demand, while MISO's resource auction showed adequate supply and reserve margins for the relevant period.
However, despite the findings, the DOE ordered the utility to keep Campbell operating, citing an energy emergency in the region.
The appeals court rejected that justification, saying the circumstances cited by the DOE did not amount to the type of emergency required to exercise its authority under Section 202(c).
The court said reasonable alternatives to continuing Campbell's operation existed and that Michigan had already taken steps to ensure adequate electricity supplies.
It also noted that no state or regional authority had sought intervention from the Federal Energy Regulatory Commission and that Michigan's governor had not declared an energy emergency.
The court therefore granted petitions challenging the DOE order and vacated it.
The ruling limits the federal government's ability to use emergency powers to delay power-plant retirements when state and regional grid-planning processes have determined that replacement resources can maintain reliability.