FERC rejects TransAlta's plan to bill the West for keeping Centralia open
Serguey Asael Shinder2 min readThe US Federal Energy Regulatory Commission has rejected TransAlta's plan for recovering the cost of keeping its Centralia coal plant in Washington state available under emergency orders from the Department of Energy, Utility Dive reports. The decision came on 1 October.
The 730 MW unit was due to retire at the end of 2025. In mid-December the DOE ordered TransAlta, based in Calgary, to keep it available for 90 days under section 202(c) of the Federal Power Act, and it has renewed the order since, most recently on 11 September. TransAlta asked to recover $19.9m in expenses for the first 90-day order and said it expected to spend another $23m on repairs to keep the unit ready.
The problem was geography. FERC found that the plan reached too far, including cost recovery from the California Independent System Operator and the Southwest Power Pool. The DOE had justified its order with the North American Electric Reliability Corporation's winter assessment for 2025–26, which flagged an elevated risk in extreme weather for the Northwest area — Montana, Oregon, Washington and parts of northern California and northern Idaho. A revised plan, FERC said, should only charge load-serving entities in that area.
But TransAlta is owed something. Opponents, including the Bonneville Power Administration, CAISO, SPP, Snohomish County PUD, other public power utilities and Washington state, argued that because Centralia had not been running, no compensation was due. According to US Energy Information Administration data cited by Utility Dive, the unit generated nothing this year through July. FERC disagreed, finding that the orders' statement that Centralia "shall not be considered a capacity resource" does not stop it from approving payment for the cost of keeping the plant operational.
The case is one of a series. Since May 2025 the DOE has used 202(c) orders to keep units at seven plants from retiring, all but one of them coal-fired. A federal appeals court last month vacated the first such order, for Consumers Energy's Campbell plant in Michigan, finding the department had defined "emergency" too broadly; the DOE has since renewed orders for units owned by several other utilities. The Sierra Club puts the cost of the 202(c) orders at about $583m. TransAlta plans a roughly $600m conversion of Centralia to natural gas, due in the second half of 2028, with the output sold to Puget Sound Energy under a 16-year contract.
Why it matters
FERC's ruling separates two questions that the emergency orders blur: whether a plant must be paid for standing by, and who pays. Its answer — yes, but only customers in the region the reliability concern names — sets a template for the other 202(c) units. For utilities in the Northwest, the bill for a plant that produced nothing this year is now theirs to argue about.