OPIS Insights

Watch: Barron’s Senior Energy Writer Laura Sanicola and OPIS Data Analytics Director Andrew Blumenfeld discuss what’s ahead for coal-fired power in the US this week.

Watch this week’s episode to gain insight into the implications of the emergency order to keep Michigan’s Campbell coal-fired power plant online, including how this could affect utility rate payers across the upper Midwest.

Transcript:

LAURA SANICOLA: Hi, everyone. This is Laura Sanicola, author of Barron’s Energy Insider, and I’m here today with Andy Blumenfeld, data analytics director of coal at Opus. Andy, thanks for joining me today.

ANDREW BLUMENFELD: I’m happy to be here. Thank you.

SANICOLA: Yeah. So I want to talk about the Campbell coal-fired power plant in Michigan. It’s slated for retirement, earlier this year, and it’s received another extension from the Trump administration to continue operating. So what can you tell us about that and what it means for, what it indicates about power prices in the region, perhaps?

BLUMENFELD: Sure. So just a real quick background. In May this year, the Department of Energy issued an emergency order to keep the Campbell plant from retiring. It was scheduled to retire at the end of May. And this is ninety day order that they’re allowed to do under the Federal Power Act. That emergency order expired at midnight on August 20th, and the Department of Energy issued another ninety day order keeping the plant operating basically until mid-November. At that time, they could even issue another ninety day order keeping it open yet, into 2026.

The order came in really at last minute and it’s difficult to operate a power plant, not knowing if you’re gonna be retiring or not. So the implications for Michigan are actually quite large in terms of trying to understand how this plan is gonna operate and who’s gonna pay for it.

Consumer’s Power or Consumer’s Energy, has already said that that plant has cost them 29 million dollars just in the first month of the emergency order. And they have put a case before the Federal Energy Regulatory Commission to try and figure out who’s going to pay for the operation of this plant because of the emergency order. And it was decided recently from the Federal Energy Regulatory Commission that that cost would be spread amongst utility rate payers across the upper Midwest. So that includes Michigan, includes nearby Wisconsin and Minnesota, Missouri, parts of Illinois, etcetera. So they’re gonna try and spread these costs across many, many power systems, and it will affect the rates for electricity, you know, for a good portion of the Midwest.

SANICOLA: So the power plant’s life was extended in part to lower energy costs for consumers, but the extension is going to keep electricity prices elevated for ratepayers in those regions. Is that sort of the right way of thinking about it?

BLUMENFELD: That’s fair to say because Consumers Energy, you know, when they had already planned for the retirement of this, already had purchased and put in place replacement electricity generation. So now we basically have what they had already planned and contracted for and the addition of or the extension of the Campbell power plant. So we have that to contend with, and the utility, the consumer’s energy is still trying to to deal with this. And this includes, you know, the cost of acquiring the coal to keep the plant running and obviously to keep people at the plant to keep it operating. So, the costs are gonna be quite, quite severe for the next few months at least, and that’s gonna become a political hot potato, not only in Michigan, but elsewhere as other plants are gonna be, you know, on the schedule to be retired here by the end of the year.

SANICOLA: And do US coal producers benefit from this extension? Who benefits exactly?

BLUMENFELD: Certainly they do. This plant will consume as much as four hundred thousand tons of coal a month, and this was unplanned demand. So the coal from this for this particular plant comes from Wyoming, and those coal producers will benefit from the additional sales that they’ll have this year.

SANICOLA: Alright. Well, thanks for breaking that down for us, Sandy, and thanks everyone for joining. We’ll see you next week.