Colorado Challenges Department of Energy’s Unlawful 202(c) Order Requiring Craig Unit 1 Coal Plant to Stay Open

DOE's edict to keep Craig coal plant open adds unnecessary costs without making electricity more reliable

Denver - Friday, Jan. 30, 2026 - The State of Colorado formally appealed the U.S. Department of Energy's 202(c) order to keep the Craig Unit 1 coal plant available for operation on Wednesday. The plant, which was slated for retirement on Dec. 31, 2025, was inoperable due to damage and the decision to keep it open requires extensive costs - without improving grid electric reliability.

The Federal Power Act provides limited authority for the Department of Energy to take action during energy emergencies. However, Colorado does not have an energy emergency. In fact, the state, along with the rest of the region, has some of the most reliable power systems in the country. The North American Electric Reliability Corporation has found no short-term or long-term elevated reliability risks in the Rocky Mountain region.

"This appeal is the first step to defend Colorado ratepayers from tens of millions of dollars of unnecessary costs to repair and maintain an expensive coal plant at the end of its life. We are trying to find a quick resolution to this ridiculous order which is creating uncertainty for employees and the community and delaying investment in new, lower cost energy projects that have been previously planned," said Governor Jared Polis.

The closure of Craig Unit 1 was subject to a thoughtful planning process that concluded that it would cost customers less to replace aging, unreliable, and expensive coal generation with proven local power generation that creates jobs, invests in Colorado communities, and lowers and stabilizes energy costs for consumers. While it is unclear what the specific cost to continue the plant will be, estimates range around $85 million per year.

"These orders will take money out of the pockets of Colorado ratepayers, and especially harm rural communities across the West who could be forced to absorb the unnecessary excess costs required to keep this plant operational," said Colorado Energy Office Executive Director Will Toor. "The Trump administration is engaging in Soviet-style central planning, driven by ideology rather than the realities of the electric grid, that will drive dirtier air and higher electric rates across our state."

This order runs counter to Colorado's orderly and measured process to ensure a stable energy grid. The state's regulations require every investor-owned retail electric utility and wholesale electric generation and transmission cooperative operating in the state to file an electric resource plan (ERP) with the Public Utilities Commission (PUC) at least every four years.

ERPs must include at least three different electric demand and energy forecasts addressing both winter and summer peaks, evaluation of existing resources, an assessment of planning reserve margins, contingency plans for the acquisition of additional resources, and a competitive, all-source solicitation to evaluate cost-effective resources to meet system planning requirements. The planning process includes a reserve margin to meet a 0.1 days per year loss of load expectation standard. Utilities use this reserve margin to propose additional generation for the planning period, where necessary. Utility plans, including any additional generation, must satisfy availability and dispatchability criteria.

These plans are vetted through a litigated process, including extensive intervener input, before a final decision by the PUC. And where generation needs arise outside of the normal ERP cycle, interim ERPs and applications for certificates of public convenience and necessity can be filed to meet those needs. These proceedings are transparent and iterative and conducted with technical and expert analysis of grid conditions and ratepayer impacts. There is simply no way that the federal government could have the level of visibility into the state's grid or resource needs as the state planning process.

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