FERC rejects TransAlta 202(c) cost recovery plan for Centralia unit

Federal regulators have turned down a plan by TransAlta to charge electric customers across a wide swath of the West for keeping its coal-fired Centralia power plant in Washington running past its planned 2025 retirement. The U.S. Department of Energy had ordered the plant kept online under an "emergency" directive, and TransAlta wanted to recover nearly $20 million in costs tied to that order. The Federal Energy Regulatory Commission said TransAlta cast too wide a net, trying to bill utilities as far away as California and the Southwest Power Pool region. Instead, FERC said any revised recovery plan should bill only utilities in the Northwest, where federal regulators had cited winter reliability concerns. The commission also ruled that TransAlta is owed payment even though the plant has produced no electricity this year.

For most homeowners, this is not an immediate bill. The costs in question would flow through wholesale power markets and could eventually show up in rates charged by utilities in the Northwest, not nationwide. TransAlta has separate plans to convert the unit to burn natural gas by 2028, with the power sold to Puget Sound Energy, a Washington utility.

The bigger picture: this is one of several Department of Energy orders issued since 2025 to delay retirement of aging power plants, mostly coal-fired, across the country. A federal court recently struck down the first such order, covering a Michigan plant, finding the government's definition of "emergency" too broad. More fights over these orders, and who pays for them, are likely ahead.