The Zombie Grid: Why DOE Keeps Dying Coal Plants Alive

Key Takeaways

• Reliability as a Shield: The Department of Energy (DOE) is increasingly using Section 202(c) of the Federal Power Act to force the survival of loss-making coal plants, framing a financial bailout of legacy assets as a technical necessity.
• The Stalled Transition: While the grid faces real stability challenges, federal intervention overrides state climate mandates, effectively freezing the energy transition to protect coal-industry profits.
• Lobbying and Logic: The “emergency” mandates often emerge from regions where coal-heavy utilities have significant political influence, raising the question of whether the crisis is being managed or merely manufactured for influence.
• The Ratepayer Penalty: These mandates shift the massive costs of uncompetitive fuel sources onto households, ensuring the fossil fuel industry isn’t the one to pay for its own obsolescence.

Reliability Theater: The Resurrection of Craig Station

On December 30, 2025, the planned retirement of Craig Station Unit 1 in Colorado was abruptly halted. This wasn’t an organic market event or a sudden surge in demand; it was a federal intervention. Department of Energy Secretary Chris Wright, the former CEO of fracking giant Liberty Energy, invoked Section 202(c) to force the aging plant back into the mix.

The official line is always “grid reliability,” a term that has become the preferred defense for any federal move that protects fossil fuel utilization. By framing the survival of a 430-megawatt (MW) coal plant as the only thing standing between a rural community and a total blackout, the DOE creates a powerful piece of political theater. It pits the immediate fear of a cold, dark house against the long-term goal of a cleaner grid, ensuring that the “Zombie Grid” remains the status quo.

The Manufactured Brittle Grid

To understand the “Zombie” strategy, you have to look at how the grid was made brittle in the first place. For decades, the political power of the coal and utility lobbies has been used to delay the very grid upgrades that would make coal-fired inertia obsolete.

The Inertia Narrative

The technical argument for keeping coal plants alive centers on “inertia,” the split-second frequency support provided by large spinning rotors. However, technology to replace this inertia (such as grid-forming inverters and synchronous condensers) has been commercially available for years. The “crisis” of missing inertia is less a law of physics and more a result of a decades-long refusal to invest in modern grid stabilization, a strategy that conveniently leaves massive coal boilers as the only remaining “solution.”

Controlled Scarcity and Fault Current

Similarly, the need for “fault current” is often used to justify mandates in regions like Indiana and Washington. By systematically under-investing in the transmission infrastructure that would connect new renewable sites to these rural hubs, legacy interests have created a localized scarcity. This scarcity then provides the legal and technical justification for the DOE to issue “emergency” mandates, essentially using a self-inflicted bottleneck to protect an existing fuel source.

The case of Centralia Unit 2 in Washington is a prime example. In December 2025, TransAlta announced a $600 million deal to convert the 700 MW facility to natural gas, a move that would cut emissions by 50 percent. Yet, the DOE stepped in with Order No. 202-25-11, mandating that the plant remain available for coal-fired operation. By blocking the transition to cleaner fuels, the DOE is forcing a cleaner plant to stay dirty under the guise of an “emergency” its own policies helped facilitate.

The Material Interest: Reliability or Rent-Seeking?

While the DOE frames these interventions as technical necessities, a more skeptical lens reveals a massive collision of material interests. The transition to cleaner energy is a direct threat to the trillions of dollars locked in fossil fuel infrastructure.

Bypassing the Rules

Section 202(c) is effectively a “get out of jail free” card for age-old environmental compliance. When a plant is under a federal emergency order, it is often granted temporary immunity from the emissions standards and state-level mandates that made its operation untenable. For owners of these assets, an “emergency” is a lucrative loophole that allows them to continue extraction and combustion without the looming costs of decommissioning.

A Public Bailout of Private Loss

If these plants were profitable, they wouldn’t be retiring. Most “Zombie” units are losing millions of dollars a year. When the DOE issues a 202(c) order, it triggers a peculiar financial arrangement where the plant owners are “made whole” through emergency rates.

For Craig Station, the minimum cost of the 90-day extension is estimated at $20 million, with annual operating expenses nearing $85 million should the mandate be renewed. For members of the Tri-State Generation and Transmission Association, this translates to rate hikes of up to 6 cents per kWh by 2030. Essentially, the public is being forced to pay a premium to keep a dying industry’s machines idling.

The Storage Cliff: A Weaponized Narrative

The DOE often cites a July 2025 report warning of a “100-fold increase in insufficient electricity hours” by 2030 if coal retirements proceed. While this data set provides a convenient justification for current mandates, it conspicuously ignores the impact of accelerated federal support for long-duration storage.

By framing the 2030 “Storage Cliff” as an inevitable catastrophe rather than a solvable engineering challenge, the federal narrative shifts from “How to build the future?” to “How to preserve the past?”. Currently, the U.S. grid contains roughly 200 gigawatts (GW) of coal capacity. Over 40 percent has closed since 2010. The remaining 60 percent is aging rapidly, and as these plants approach the end of their design lives, the frequency of 202(c) orders will likely increase as a last-ditch effort to stall the inevitable.

Timeline: The Zombie Grid Horizon

The “Zombie Grid” strategy has a shelf life. You cannot keep a 50-year-old boiler running indefinitely through legal decrees.

Short-Term (2026-2027)

Expect more Section 202(c) orders, particularly in the MISO (Midwest) and PJM (Mid-Atlantic) regions. While solar has overtaken coal globally, the local distribution of that power remains hampered by the ongoing transformer crisis. The DOE will likely continue to use these “90-day” rolling orders to bridge the physical gaps its parents ignored.

Medium-Term (2028-2030)

The conflict between state regulators and the DOE will come to a head in the courts. States like Washington and Colorado have statutory mandates to eliminate coal. When a federal emergency order forces a plant to violate state law, the constitutional question of “federal preemption” will be tested. Meanwhile, the physical degradation of these plants will reach a breaking point. A 202(c) order can force a plant to be available, but it cannot prevent a turbine failure caused by decades of wear and tear.

Long-Term (2030+)

The U.S. must solve the “Inertia Gap.” This will likely involve a massive rollout of synchronous condensers: essentially large spinning motors used solely to provide inertia and voltage support. Until then, the “Zombie Grid” will remain the awkward, expensive, and carbon-heavy insurance policy for a nation that isn’t yet ready for its own future.

What This Means for You

As a consumer and citizen, the “Zombie Grid” affects your wallet and your safety.

If you’re a ratepayer:

• Expect “Reliability Surcharges” or increases in the delivery portion of your bill. Keeping loss-making plants alive is expensive, and those costs are inevitably passed down.
• Monitor your local utility’s “Integrated Resource Plan” (IRP) for mentions of “capacity shortfalls.”

If you rely on electric heat or EVs:

• The grid is becoming more fragile because it is being patched rather than rebuilt. During extreme cold snaps, the “Zombie” plants might be the only thing preventing load-shedding.
• Consider home backup solutions. The rise of Section 202(c) orders is an admission by the federal government that the grid’s margin for error has reached zero.

The Path Forward: Breaking the Ghost of the Coal Age

The “Zombie Grid” is a physical manifestation of a policy transition that is currently being sabotaged by institutional inertia. The energy sector attempts to build the 21st-century grid while relying on the rusting anchors of the 20th. Forcing loss-making coal plants to stay alive is a desperate, short-term fix for a long-term architectural problem. Until the U.S. can solve the fundamental physics of grid stability without fossil fuels, the ghosts of the coal age will continue to haunt the wires, at your expense.