US prolongs Michigan coal plant's operation until November despite costs

By Timothy Gardner

WASHINGTON, Aug 21 (Reuters) - The U.S. Energy Department on Thursday extended an order for a Michigan coal plant to stay open through November 19, even though it had been planning to shut permanently for economic reasons and complying with the original order has already cost the company tens of millions of dollars.

In May, the Energy Department issued the original order, normally reserved for natural disasters, for the 1,500 megawatt J.H. Campbell plant in West Olive, Michigan to stay open. The order came a week before Consumers Energy, the majority owner of the plant, planned to shut and after it had depleted its coal stockpile and reassigned staff.

Thursday's order is the latest in a string of U.S. moves to support fossil fuels, after President Donald Trump declared an energy emergency on the first day of his second term. In April, he signed executive orders aiming to boost coal production, in one of a series of actions that run counter to global efforts to curb carbon emissions, saying the administration was "going to put the miners back to work."

Chris Wright, the U.S. energy secretary, said the order "will help ensure millions of Americans can continue to access affordable, reliable, and secure baseload power regardless of whether the wind is blowing or the sun is shining.”

Trump claims that rapid adoption of solar and wind power has made U.S. electricity unstable and expensive, justifying his bid to end most subsidies for them. But reliability has improved in Texas, the U.S. grid with the most renewable energy, according to regulatory filings and price data reviewed by Reuters.

Consumers Energy said in a financial filing that staying open cost $29 million over the first 38 days since the first order.

A report commissioned by environmental groups said this month that keeping Campbell open would cost $279 million annually. It said if the U.S. mandates keeping open fossil fuel plants that had been slated to retire by the end of 2028, it could cost $3 billion or more per year. The costs, it said, would be distributed across homeowners and businesses that pay power bills in all regions but the U.S. Northeast.

The Federal Energy Regulatory Commission ruled last week that the costs for keeping Campbell open could be spread across 10 states across the Midwest.

Consumers Energy spokesperson Brian Wheeler said the company expects to continue operating the plant as required. Consumers was pleased that FERC approved its request to recover costs by allocating them across the region, Wheeler said.