Full Breakdown
Federal Energy Regulatory Commission Reviews MISO's Cost Allocation for Campbell Power Plant
10/7/2025, 8:56:40 PM
Overview of the Situation
The Federal Energy Regulatory Commission (FERC) is currently evaluating the Midcontinent Independent System Operator's (MISO) cost allocation proposal for the J.H. Campbell coal-fired power plant in West Olive, Michigan. This review follows an emergency order from the U.S. Department of Energy (DOE) mandating the plant's continued operation beyond its planned retirement date due to an alleged energy emergency in the region.
Background and Context
The J.H. Campbell plant, with a capacity of 1,560 megawatts, was scheduled to shut down on May 31, 2025. However, in late May, the DOE intervened, citing an energy emergency and ordering the plant to remain operational. A subsequent 90-day emergency order was issued, extending its operation until November 19, 2025, with potential further extensions. The plant's owners, which include Consumers Energy, Wolverine Power Supply Cooperative, and the Michigan Public Power Agency, have not yet sought to recover costs associated with this order.
Cost Allocation Proposal
MISO's cost recovery plan proposes to allocate the operational costs of the Campbell plant across its central and northern zones based on energy usage. However, FERC has directed MISO to consider a demand-based allocation method, arguing that the costs should reflect the parties responsible for the demand. Critics, including a coalition of large energy users and environmental groups, argue that MISO's proposal deviates from established cost causation principles, asserting it is unjust and unreasonable.
Criticism and Opposition
Environmental groups, including the Sierra Club and Earthjustice, have filed legal challenges against the DOE's emergency order, claiming there is no actual emergency in MISO's operational footprint. They argue that the cost allocation plan fails to demonstrate that utilities or ratepayers in MISO zones 1 through 7 will benefit from the Campbell plant's continued operation. The groups contend that the commission's reliance on the DOE's emergency declaration is unfounded and that the proposed cost allocation could set a concerning precedent for future emergency orders.
Official Statements & Responses
In response to the ongoing situation, FERC has emphasized the need for a fair cost allocation method that aligns with demand-based principles. The commission's directive to MISO reflects a commitment to ensuring that cost recovery mechanisms are just and reasonable. Steve Herrygers, Consumers Energy’s senior executive director of high voltage distribution, stated, “Consumers Energy wants to ensure our customers are informed and prepared, and we are grateful for their patience.”
What's Next
FERC is expected to make a decision on MISO's cost allocation proposal in the coming months. The outcome will have significant implications for the operational future of the J.H. Campbell plant and could influence how similar situations are handled in the future. Additionally, the ongoing legal challenges from environmental groups may further complicate the regulatory landscape surrounding the plant's operation.
Verbatim Quotes
- “Given that the Campbell units are being retained for capacity and resource adequacy purposes under the DOE Order, using an energy based load ratio share instead of a demand based load share deviates from cost causation principles and therefore, is unjust and unreasonable,” — Coalition of MISO Transmission Customers
- “Instead, the commission order relied wholly on the DOE’s unlawful emergency declaration both to determine the scope of cost allocation and as the sole basis for the conclusion that an emergency exists in Zones 1-7,” — Environmental Law & Policy Center
This situation highlights the complexities of energy regulation and the balance between operational needs and regulatory compliance in the evolving energy landscape.
