A federal appeals court on Friday invalidated an order issued by the Trump administration that compelled a coal-fired power plant in Michigan to remain operational beyond its planned retirement date, marking a setback for efforts to sustain the coal industry. The ruling addresses the Energy Department’s directive requiring the J.H. Campbell coal plant in West Olive, Michigan, to continue running past its intended closure in May 2025, citing a purported "energy emergency."

For over a year, the Energy Department invoked emergency powers under the Federal Power Act to keep the plant open, periodically renewing the order every 90 days. Historically, this provision has been applied briefly and primarily during extreme weather events. However, the Trump administration expanded its use to maintain operations at multiple coal plants across the country.

The state of Michigan filed suit against the federal government, with Illinois, Minnesota, and a coalition of environmental organizations joining the case. A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled that the administration had exceeded its authority by using emergency powers in this context. Judge Cornelia Pillard underscored that decisions about power generation fall primarily within state jurisdiction, and federal intervention should be limited to situations where states and grid operators are unable or unwilling to respond.

Michael Lenoff, lead attorney for Earthjustice, one of the environmental groups involved, said the court’s decision affirms that emergency authority should be reserved for genuine emergencies, not for supporting preferred energy sources or circumventing state control.

The Energy Department has not announced whether it will seek an appeal. In a statement, department spokesperson Ben Dietderich maintained that the emergency orders helped avert blackouts during a recent winter storm and affirmed the department’s commitment to ensuring energy security.

Consumers Energy, the owner of the J.H. Campbell plant, had been planning to retire the 64-year-old facility for several years, intending to replace its output with a combination of natural gas and other resources, pending regulatory approval. Regulatory reviews found this transition would deliver cleaner, more cost-effective electricity, offsetting the loss from the plant’s closure. Nevertheless, the department’s orders required the plant to continue operating, resulting in significant costs. Consumers Energy reported expenditures of $259 million linked to compliance with the emergency orders through June, expenses expected to be passed on to electricity consumers in the region.

Coal use has been steadily declining in the United States over recent decades, supplanted by natural gas as well as renewable sources like solar and wind. Coal is considered the most polluting fossil fuel, producing greater greenhouse gas emissions and air pollutants than other energy sources. The Trump administration has sought to bolster the coal industry by loosening environmental regulations and providing grants aimed at upgrading coal facilities. The rise of data centers and other factors also contributed to delaying some planned coal retirements. While approximately 8.5 gigawatts of coal capacity were slated to close by early 2025, only about 2.7 gigawatts have actually been retired to date. Despite this, coal-generated electricity is projected to decline by roughly 19 percent this year compared to the previous year.

After the ruling, Consumers Energy indicated it would continue operating the plant, as the court’s decision addressed only the initial 90-day emergency order, which has since expired. The company is reviewing the court’s ruling and expressed a commitment to complying with applicable legal requirements.

Energy analysts suggest the department could either appeal the decision or continue issuing emergency orders with adjusted justifications that align more closely with legal standards outlined by the court. Environmental advocates argue the ruling reinforces the authority of states to determine when to retire power plants and call on the Energy Department to cease intervention efforts.

In addition to Michigan, the Energy Department has issued orders to maintain coal operations in Washington, Indiana, and Colorado. A recent analysis estimated that keeping the nation’s coal plants open against planned retirements through the end of the Trump administration could cost consumers at least $3 billion annually.