The Federal Energy Regulatory Commission rejected TransAlta's proposal to recoup $19.9 million in costs for keeping its 730-megawatt coal-fired Centralia power plant in Washington running under a U.S. Department of Energy emergency order, according to a report published Thursday by Utility Dive. The Calgary-based company had been seeking compensation for expenses tied to the DOE's first 90-day emergency order issued in mid-December, which blocked TransAlta from shutting down the plant at the end of 2025 as it had planned. FERC's decision centered on the geographic scope of TransAlta's cost recovery plan, which the commission said reached too far beyond the region justifying the emergency order.
TransAlta's proposed plan included recovering costs from the California Independent System Operator and the Southwest Power Pool, among other entities. The DOE had based its emergency order on the North American Electric Reliability Corp.'s 2025-2026 Winter Reliability Assessment, which identified an "elevated risk during periods of extreme weather" in the Northwest assessment area covering Montana, Oregon, Washington, and parts of northern California and northern Idaho, FERC noted. The commission told TransAlta that any revised cost recovery filing should only seek reimbursement from load-serving entities within that specific assessment area. TransAlta had also projected spending an additional $23 million on repairs to maintain the Centralia unit's availability. Opponents of the cost recovery plan included the Bonneville Power Administration, SPP, CAISO, Snohomish County PUD and other public power utilities, plus Washington state and the Washington Utilities and Transportation Commission.
Despite arguments that TransAlta shouldn't receive compensation because the Centralia plant hasn't operated under the DOE emergency order—the unit generated zero electricity through July this year, according to the latest U.S. Energy Information Administration data—FERC sided with the company on eligibility. "We find that the Emergency Orders' statements that Centralia 'shall not be considered a capacity resource' do not preclude the commission from approving compensation for the costs that TransAlta incurred to keep Centralia operational," the commission stated. The DOE has issued multiple 90-day emergency orders to TransAlta under the Federal Power Act's section 202(c), most recently on Sept. 11. TransAlta plans to convert the Centralia unit to run on natural gas, with the roughly $600 million, 700-megawatt conversion expected to finish in the second half of 2028, and power from the unit would be sold to Puget Sound Energy under a 16-year agreement.
The report notes that the DOE has used what it characterizes as a novel interpretation of its Federal Power Act section 202(c) authority to issue a series of emergency orders since May 2025, preventing generating units at seven power plants from retiring—all but one coal-fired. A federal appeals court vacated the DOE's first emergency order last month, which had been issued to stop Consumers Energy from closing its majority-owned Campbell power plant in Michigan, finding the DOE had adopted an overly expansive definition of "emergency." Since that Sept. 11 court decision, the DOE has renewed 202(c) orders affecting generating units owned by CenterPoint Energy, Northern Indiana Public Service Co., TransAlta, Tri-State Generation and Transmission Association, Platte River Power Authority, Salt River Project, PacifiCorp, and Public Service Co. of Colorado. According to the Sierra Club, keeping the generating units under 202(c) orders from retiring has cost about $583 million—a figure that underscores the financial stakes as utilities navigate the tension between planned retirements and federal emergency interventions aimed at maintaining grid reliability during extreme weather.