By Laura Sanicola
A Trump administration official said Wednesday that efforts to keep coal-fired power plants running beyond their planned retirement dates will ultimately be paid for by electricity customers.
Federal efforts to block coal plant retirements aim to preserve grid reliability amid a surge in electricity demand driven by data centers and artificial intelligence, said Peter Lake, a member of the White House's National Energy Dominance Council, speaking at the American Enterprise Institute's "Powering Prosperity and the New Electricity Economy" conference in Washington.
"All costs end up on ratepayers," Lake said, responding to a question about who pays when utilities are required by the federal government to keep coal plants online after having invested billions of dollars in replacement power generation.
He added that industrial customers typically bear a larger share of those costs, equivalent to about 60%. But it depends on the utility, their generation makeup, and how rate structures allocate expenses based on load size and peak demand.
The Trump administration has so far prevented dozens of coal units from retiring, invoking emergency authorities and directing federal agencies to intervene in power markets. Officials say the U.S. grid cannot afford to lose generation as electricity demand accelerates faster than expected.
The administration has also framed its coal policy as an affordability and reliability measure, aimed at avoiding what Lake said could be $34 billion to $40 billion in replacement costs if operating coal plants were allowed to retire before new dispatcheable resources are in place.
Government estimates call for roughly 100 gigawatts of new power by 2030, a figure Lake compared with adding "California plus two New Yorks" to the grid in less than five years.
"Yes, we need coal. We need gas. We need batteries. Anything with an answer," Lake said.
Coal is getting a boost from AI power and industrial demand. Several utilities, including Duke Energy and some subsidiaries of Southern Company, revised plans to retire some coal units after forecasting sharp increases in demand from data centers and advanced manufacturing. The changes were approved through state-regulated processes.
But utilities say that being forced to keep some coal plants open is upending years of state-approved planning.
For example, the Michigan-based Campbell coal plant, owned by CMS Energy, was forced by the Trump administration to continue operating into 2026 after being scheduled to retire in 2025, costing about $615,000 a day, according to company filings. The state utility running the plant, Consumers Energy, had already invested in replacement gas generation, renewable contracts, and grid upgrades.
Consumers Energy warned that extending Campbell's operations will adds millions of dollars in incremental fuel, maintenance, and staffing costs that weren't contemplated in approved rates, according to regulatory filings.
Consumers in regulated energy markets may be hit hardest as coal plants stay open longer than planned. A utility that voluntarily plans to delay a plant retirement often gets approval from regulators in a deal that includes freezing rates for consumers and special tariffs that shift costs toward large industrial users like data centers.
That framework can collapse when Washington forces plants to keep operating. When a plant is kept online after replacement assets are already in the rate base, customers effectively pay twice -- once for the new plant, and again for the old one.
Some utilities are trying to manage rising AI power needs without passing along costs to households. In Louisiana and parts of the Midwest, for instance, utilities have negotiated special large-load tariffs and contract terms with data-center customers that include higher base rates, upfront infrastructure contributions, and curtailment provisions during grid stress.
Still, some energy experts say the administration's plans to delay coal retirements may be counterproductive and obscure the more pressing problem: permitting delays to upgrade the grid.
"Mandating that an old power plant operate isn't consistent with a market-based approach," said Rob Gramlich, president of Grid Strategies LLC, at the AEI conference, noting that tens of gigawatts of approved generation remain stalled in interconnection queues due to permitting and transmission constraints.
A study by Grid Strategies, a consultancy funded partly by environmental groups including the Sierra Club, found that the administration's plan to stop fossil fuel plants from closing could cost ratepayers $3.1 to $5.9 billion a year.
Write to Laura Sanicola at laura.sanicola@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 14, 2026 15:27 ET (20:27 GMT)
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