Owners Seek Closure of Colorado’s Craig Coal Unit, Trump Administration Orders It Kept Open

Lead

Co-owners of the Craig Station power complex in northwest Colorado planned to retire Craig 1 at the end of 2025 after building wind and solar replacements, but a federal order issued the day before that scheduled shutdown has required the unit remain available for at least 90 days. The U.S. Department of Energy, citing broader electricity needs, directed the unit to stay online; the plant’s owners say the order forces them into needless operating costs and may amount to an unconstitutional taking. The dispute has prompted legal challenges from Colorado officials and environmental groups and raised broader questions about the administration’s emergency use of energy authorities.

Key Takeaways

• Craig Station is a three-unit coal-fired complex in northwest Colorado; operators planned to retire its oldest unit, Craig 1, at the end of 2025.
• The Department of Energy issued an order the day before that planned retirement requiring Craig 1 to remain available for 90 days.
• Tri-State Generation & Transmission Association and Platte River Power Authority, co-owners of the plant, petitioned the DOE to rescind the order and say the mandate imposes uncompensated costs.
• Analysis commissioned by the Sierra Club and produced by Grid Strategies estimates keeping Craig 1 running could cost $85 million to $150 million per year at average output.
• The DOE defended the order in an emailed statement saying the government needs more generation to support domestic manufacturing and the growing electricity demands of artificial intelligence.
• State attorneys general and environmental groups have filed legal challenges, arguing the closures were planned transitions rather than emergencies that justify federal commandeering.
• Similar emergency orders have kept eight coal units online past planned retirements under this administration, and a related court decision in Michigan is expected next summer.

Background

Over the past two decades U.S. utilities have retired hundreds of coal-fired generators in favor of lower-cost gas, wind and solar, a shift that has reduced carbon emissions and local air pollution. Many utilities planned retirements years in advance and invested in replacement generation and transmission to ensure reliability while reducing costs for customers. Craig Station sits atop a high desert plateau in northwest Colorado and supplies electricity primarily to rural customers across parts of the Western Interconnection.

Administrations before 2025 tended to invoke federal emergency authority rarely and mostly during wars or extreme weather events. Since returning to office, President Trump has repeatedly signaled support for coal — including an executive action directing the Defense Department to buy more electricity from coal-fired plants — and his Energy Department has used emergency powers to keep multiple coal units operating past planned retirements. Opponents say those interventions override locally planned transitions and impose avoidable financial burdens.

Main Event

The owners of Craig Station decided in 2016 that retiring Craig 1 would be the most cost-effective way to meet customer needs and comply with air-quality rules. They subsequently developed wind, solar and transmission projects intended to replace the unit’s generation. On the day before Craig 1 was scheduled to be retired at the end of 2025, the Department of Energy issued an order requiring that the unit remain available for at least 90 days.

Tri-State and Platte River argued the order was unnecessary and unconstitutional. In late January Colorado’s attorney general and environmental groups filed challenges, and the two co-owners filed a petition asking the DOE to reconsider, saying they have already procured replacement resources and that the order forces them to buy coal and pay to maintain a facility they intended to close.

The Energy Department declined an on-the-record interview for this report but provided an emailed statement from spokesperson Caroline Murzin saying the United States needs significant additional generation to support domestic manufacturing and growing electricity demands tied to artificial intelligence. Tri-State’s CEO Duane Highly warned that keeping Craig 1 open will shift costs to ratepayers; company officials declined further interviews for this story.

Environmental groups quickly quantified the potential bill impacts. An analysis done for the Sierra Club by Grid Strategies put annual costs to keep Craig 1 at its average output between $85 million and $150 million, on top of the expense already incurred for new wind, solar and transmission projects intended to replace the unit’s output. Advocates say that effectively makes customers pay twice for overlapping resources.

Analysis & Implications

The owners’ legal theory centers on the Constitution’s protection against uncompensated takings: they contend the federal order requires them to operate and maintain private assets for public benefit without compensation. If a court accepts that framing, it could limit the executive branch’s ability to impose similar mandates in future reliability disputes. Conversely, courts may defer to the DOE’s judgment on reliability, especially if the agency documents genuine shortfalls.

From a grid-reliability perspective, the DOE argues the nation faces rising and shifting demand patterns — including loads tied to advanced manufacturing and AI-driven data centers — that could create near-term vulnerabilities. But owners and some grid experts counter that many retirements are coordinated and that replacement resources have already been lined up, so ordering a plant to remain online undermines planned investments and distorts markets.

Financially, the combination of paying for replacement wind and solar while also incurring coal operating costs risks higher bills for customers and could discourage future utility investments in renewables if owners fear federal override. Politically, the administration’s interventions signal strong executive support for coal producers and may slow the pace of retirement announcements or alter how utilities plan transitions.

Comparison & Data

The table summarizes the concrete numbers at the center of the dispute. The $85 million to $150 million range represents an independent outside estimate of annual operating cost impacts at average output if the unit is kept online. Those figures exclude prior capital already spent on the replacement wind, solar and transmission projects and do not necessarily represent final charges to ratepayers, which will depend on regulatory decisions and accounting choices.

Reactions & Quotes

Officials and advocates offered terse, consequential statements as the dispute unfolded.

“All of that is effectively commandeering the property, private property, of these entities.”

Ari Peskoe, Electricity Law Initiative, Harvard Law School

Peskoe framed the owners’ constitutional claim as a forced appropriation of private assets without compensation, a legal argument that could shape upcoming litigation.

“Customers will essentially be paying twice.”

Matt Gerhart, Senior Attorney, Sierra Club

Gerhart summarized the Sierra Club’s concern that ratepayers will cover both the new replacement resources and the additional costs of running Craig 1.

“Thanks to President Trump’s leadership, the Energy Department is unleashing energy dominance to reduce energy costs for American families and strengthen the electric grid.”

Caroline Murzin, DOE spokesperson (emailed statement)

The DOE framed the order as part of a broader policy to secure generation for economic and grid objectives, citing industrial and AI-related electricity needs.

Unconfirmed

• The precise modeling and operational data the DOE used to justify the Craig 1 order have not been publicly disclosed in full, so the magnitude of any immediate reliability risk remains unverified.
• The final amount ratepayers will be billed for keeping the unit online depends on regulatory decisions and accounting treatment and is therefore not yet certain.
• How broadly the courts will accept the owners’ taking claim versus deferring to the DOE’s reliability judgment remains an open question until rulings are issued.

Bottom Line

The clash over Craig 1 is more than a single plant dispute: it tests the limits of federal emergency authority, the legal protections for private utility property, and the practical interaction between planned decarbonization and short-term reliability claims. If courts side with the owners, federal agencies may face tighter constraints before imposing similar orders; if courts defer to the DOE, federal reliability interventions could become a more common tool to preserve conventional generation.

For customers and utilities, the dispute signals heightened regulatory and legal risk around retirement planning. Stakeholders should expect continued litigation, regulatory filings and policy debate this year, and utilities contemplating retirements will likely build stronger, more transparent reliability cases to reduce the chance of future federal intervention.

Sources

• NPR (media: original reporting)