FERC Rejects a $19.9m Bill for a Coal Plant That Made No Power

The Federal Energy Regulatory Commission on 1 October 2026 rejected TransAlta's plan to recover $19.9 million it spent keeping the 730 MW coal-fired Centralia plant in Washington available under a US Department of Energy emergency order. The unit generated no electricity at all in the first seven months of this year, according to Energy Information Administration power production data.

FERC's objection was geographic rather than philosophical. TransAlta had proposed recovering part of the cost from the California Independent System Operator and the Southwest Power Pool. The commission noted that the Department of Energy justified its order by citing the North American Electric Reliability Corporation's 2025-2026 Winter Reliability Assessment, which found the Northwest assessment area, covering Montana, Oregon, Washington and parts of northern California and northern Idaho, faced elevated risk during periods of extreme weather. Any revised filing, FERC said, should recover costs only from load-serving entities inside that area.

On whether a plant producing nothing can bill anyone at all, the commission sided with TransAlta.

Who turned up to object

The opposition was broad for a cost-recovery docket. It included the Bonneville Power Administration, the Southwest Power Pool, the California ISO, Snohomish County Public Utility District and other public power utilities, the state of Washington and its Utilities and Transportation Commission. Calgary-based TransAlta had planned to retire the unit at the end of 2025 until the Department of Energy's first 90-day order in mid-December blocked it, and told FERC it expected to spend a further $23 million on repairs to keep it available.

A narrowing legal footing

The order lands three weeks after the department's use of section 202(c) of the Federal Power Act took its first serious hit in court. On 11 September 2026 a unanimous three-judge panel of the US Court of Appeals for the District of Columbia Circuit vacated the first such order, which had kept Consumers Energy's J.H. Campbell plant in West Olive, Michigan running past a May 2025 retirement date already approved by state regulators and the MISO grid operator. Judge Cornelia Pillard, writing for the panel, called section 202(c) a narrow, last-resort backstop and found no emergency within the meaning of the statute. Michigan Attorney General Dana Nessel had challenged the order, extended five times before the ruling.

The department has not retreated. Since the Campbell decision it has renewed 202(c) orders covering units owned by CenterPoint Energy, Northern Indiana Public Service Company, Tri-State Generation and Transmission Association, PacifiCorp and others, and issued a further 90-day order to TransAlta on 11 September. Since May 2025 it has used the provision to stop units at seven power plants retiring, all but one coal-fired.

The judgment worth stating plainly is that cost allocation, not legality, is now the binding constraint on this policy. Vacating one order took sixteen months of litigation. FERC can decline to spread the bill in a single order, and did. If emergency-order costs must sit with load-serving entities inside one NERC assessment area, the utilities and state commissions in that area have every reason to contest each renewal, and the per-customer arithmetic becomes visible in a way it never is when costs are socialised across three markets. That matters beyond Washington state, because the reliability assessments the department leans on are being stretched by data-centre load, as Parallax Nexus reported in August when PJM asked FERC to curtail new data centres first.

The total cost of the programme is not known, and no federal agency publishes a running figure. Consumers Energy's filings with the Securities and Exchange Commission put the cost of running Campbell past its retirement date at more than $248 million by June 2026, about $642,000 a day. The Sierra Club, which litigated against the orders and is not a neutral party, estimates roughly $583 million across all units held open under 202(c). TransAlta's own plan is to convert Centralia to natural gas by the second half of 2028, a roughly $600 million project yielding 700 MW under a 16-year supply agreement with Puget Sound Energy.