Electric Co-ops Push EPA to Drop Gas Plant Carbon Rules Blocking Data-Center Builds
Cooperative executives say the 40% capacity-factor threshold makes new gas generation unfinanceable for data centers, while state permits still embed the rules.
Electric cooperative chief executives called on the federal government during the week of 2026-08-17 to repeal greenhouse gas standards for gas-fired power plants, arguing the rules block new generation needed to serve surging data-center load, Utility Dive reported.7
Under the Biden-era standards, new gas plants running above a 40% capacity factor must meet a carbon dioxide limit based on highly efficient combined-cycle technology and install carbon capture to trap 90% of emissions by 2032. For a plant built to serve a data center running at a 95% to 100% load factor, that combination is not financeable at current gas and power prices, the cooperatives contend.7
The executives pressing the case — Tudor, Brickhouse and Bloodworth among them — represent cooperatives covering roughly 60% of the cooperative family across the United States, according to Utility Dive. Matheson said the Trump administration "clearly understands our issues" and backs outright repeal rather than modification, because he does not believe the rule can be adjusted in a way that makes sense for the load profiles his members are being asked to serve.7
State permitting has not waited for Washington to settle the question. Regulators are still writing EPA carbon rules into air permits for new gas-fired plants even as the agency moves toward repeal, and how they do that varies state by state, E&E News reported. A developer can clear a state permit with capture obligations attached and then face a different federal regime by the time construction starts. That gap between federal intent and state practice is the live risk for anyone making a final investment decision now.3
The repeal package is still at the White House Office of Management and Budget, which is reviewing the rollback before it clears. Insiders watching the process told E&E News the package could get a major overhaul before it emerges, leaving the final scope uncertain.2
The broader regulatory picture has cut in both directions. EPA administrator Lee Zeldin called the Trump administration's endangerment decision the "single largest deregulatory action in US history," removing a cornerstone of climate regulation for stationary sources. The power plant standards sit downstream of that decision, and their repeal would complete the chain for gas generation.1
But the D.C. Circuit on 2026-06-26 denied a challenge by several states and industry groups to a 2024 EPA rule tightening the national ambient air quality standard for fine particulate matter. Soot permitting is separate from carbon, yet it still constrains new gas and coal plants in nonattainment areas. That standard survived court.4
For coal, the administration's interventions are already measurable. Through July, the Trump administration has "preserved more than 13 GW of coal capacity that would have closed by now absent intervention," according to a National Coal Council report. The economics behind those preservations are less encouraging: a Wyoming Energy Authority analysis reported by CNN put the cost of building a proposed West Virginia coal plant at $10 billion and an Alaska facility at $8 billion, both assuming carbon capture. DOE offered $78 million to AES for the Warrior Run coal plant in Maryland, which shut in 2024 and has explored reopening. John Miller, a managing director and energy analyst, said electricity from such plants would likely cost far more than competing gas, solar, wind or battery alternatives.5
Indiana is one near-term test of what deregulation means in practice. EPA proposals to keep Indiana coal plants running would, according to Canary Media, put at risk roughly 2 million tons of coal ash held back by aging metal seawalls that advocates fear could fail and release toxic material into Lake Michigan. Cmar, an analyst, said anything reducing costs affects site decisions on continued operation. Mining and power plant representatives praised the moves; EPA says they will lower electricity costs.6
NYMEX Henry Hub front-month was trading at $2.90/MMBtu on 2026-09-16, down 1.02% on the session. Gas prices are not yet reflecting a demand surge from delayed retirements or accelerated construction. If the repeal unlocks a wave of gas-fired builds for data centers, the first signal is more likely to show in forward curves and turbine order books than in spot.7
The 40% capacity-factor threshold is the number to watch when OMB's review concludes. It is the single parameter that decides whether a gas plant built for near-continuous data-center load needs carbon capture. A narrower repeal that leaves that threshold intact would give the cooperatives little of what they came to Washington asking for.2,7