Court Voids DOE's Coal Must-Run Order as Campbell Plant Compliance Costs Hit $259 Million
A federal appeals court struck down the DOE's must-run order for Michigan's J.H. Campbell plant after compliance costs reached $259 million.
A federal appeals court on Friday (2026-09-11) vacated the U.S. Department of Energy's emergency order requiring Consumers Energy to keep Michigan's J.H. Campbell coal plant running past its planned retirement date, ruling the DOE had usurped state authority over generating resources.3
The ruling came after a year-long compliance process had already become expensive. In a July 28 (2026) filing with the Securities and Exchange Commission, Consumers disclosed that five consecutive DOE emergency orders under Section 202(c) of the Federal Power Act had cost the utility $259 million on a net basis through June 30, after applying $239 million in MISO revenues generated while Campbell ran under federal compulsion.3,1
The net cost had risen sharply over the prior three months. Through March 31, Consumers had reported $138 million in total compliance costs; by June 30, that figure had reached $259 million, a near-doubling in a single quarter. The pace reflects how quickly an aging coal unit's operating expenses accumulate when economic dispatch logic is overridden by federal order.1
Michigan Attorney General Dana Nessel separately put the toll on Consumers customers at $180 million through March 2026. The Sierra Club has estimated that the combined cost of DOE's must-run orders across affected MISO plants has risen to nearly $550 million to date.2
Campbell's retirement had been planned since 2021, when Consumers began identifying lower-cost replacement resources to meet Michigan's clean power mandate. The utility projected that closing the plant would save customers $600 million through 2040. Those savings never began to accumulate; instead, the DOE extended Campbell's operating life five consecutive times under Section 202(c), each round adding to the compliance bill.2,1
"The court rebuked the Trump administration's abuse of emergency powers," Michael Lenoff, an Earthjustice attorney, said in a press release. "The DOE needs to stay in its lane and use its emergency powers only in actual emergencies."3
The court's ruling struck at the DOE's legal premise that Section 202(c) emergency authority can override a state-sanctioned retirement schedule. Canary Media reported Friday (2026-09-11) that the decision could undermine the administration's broader strategy of using must-run orders to preserve coal capacity. Other 202(c) orders across the MISO footprint share the same statutory foundation, giving legal challengers a direct precedent to cite.3,2
The MISO revenues embedded in Consumers' cost disclosure show how market conditions partially shape the financial exposure of running a plant under compulsion. Consumers earned $239 million selling Campbell's output into MISO markets during the compliance period. But even with that offset, the net cost reached $259 million through June 30. Back-calculating from both figures, the gross compliance cost before the MISO offset ran to roughly $498 million over the same span.3,1
Still unresolved is cost recovery. FERC was still considering, per Consumers' July 28 (2026) SEC filing, the utility's request to recoup the $42 million net cost of the initial 90-day stay-open order, which ran from late May to late August 2025. Cost-recovery requests covering the four subsequent orders had not yet reached a comparable FERC review stage.1
A favorable FERC ruling for Consumers would establish that utilities subject to 202(c) orders can pass compliance costs through to ratepayers, a precedent that directly affects other MISO utilities in similar situations. If FERC denies recovery or sits on the decision, the $259 million net cost remains with Consumers and its shareholders — sharpening the financial case for any utility to challenge future DOE emergency orders in court before they run their course.1