TransAlta CEO: DOE Coal Plant Order Unlikely to Run Due to 'Flush' Power Supplies

TransAlta's CEO said the Washington coal plant the DOE ordered to stay online will likely never run given the region's "flush" power supplies. The emergency order is being challenged in court by the state.

The chief executive of TransAlta Corp. cast doubt on whether a Washington state coal plant the U.S. Department of Energy ordered to remain operational will actually be needed, citing "flush" power supplies in the Pacific Northwest. The comments came during the company's fourth-quarter earnings call on February 28, as the Calgary-based power generator navigates a federal emergency directive it considers unnecessary.

The DOE issued an emergency order in December requiring TransAlta to keep Centralia Unit 2 Washington's last remaining coal plant available for dispatch through March 16, 2026. The approximately 730-megawatt unit had been scheduled to retire at the end of 2025 under a 2011 state law and agreement with Washington regulators. The order, issued under Section 202(c) of the Federal Power Act, cited the North American Electric Reliability Corp.'s winter assessment finding the region faces "elevated risk" during extreme cold events.

Despite the mandate, TransAlta executives indicated the plant will likely never actually run. The company's 2026 outlook "does not include any impact from the order because it expects to recover related costs," management said on the earnings call. The region's power supply remains "flush" with adequate resources to meet current demand, making activation of the aging coal unit improbable.

Washington Attorney General Nick Brown has aggressively challenged the order, filing a petition with the Ninth Circuit Court of Appeals asking it to "hold unlawful, vacate, and set aside the Centralia Order."  Brown also sued the DOE for unlawfully withholding records related to the emergency directive. Environmental groups including the Sierra Club and Earthjustice filed separate legal challenges.

"Trying to force Washington to restart a defunct power plant is not only illegal, but would also jeopardize public health," Brown said. "Washington state will not be bullied." 

The dispute highlights broader tensions as the DOE has issued multiple similar orders across the Midwest and West, citing reliability concerns from rising electricity demand and accelerated generation retirements. TransAlta plans to convert Centralia Unit 2 from coal to natural gas under a long-term tolling agreement with Puget Sound Energy, with a target commercial operation date of late 2028.