Trump said in a June 4 White house announcement that he would use the Cold War-era Defense Production Act to expedite and justify funding, citing critical national security concerns over insuring sufficient power capacity for U.S. artificial intelligence data centers.

As announced, about $425 million will be used to modernize 13 operating coal fired power plants in Indiana, Kentucky, North Carolina, North Dakota, Oklahoma, Tennessee, West Virginia and Wisconsin.

New Plants Planned in Alaska, West Virginia 

Another $185 million from the U.S. Energy Dept. is set to match corporate financing for the new coal plants. The agency said one proposed project near Anchorage, Alaska, would have 1.25-GW capacity, total project value of $190.4 million and department funding of $89 million. It would offset declining natural gas but has mounting opposition and still lacks final design and cost detail, permits and signed utility power agreements, according to reports, which also cited added costs for needed support infrastructure that could approach $1 billion. The developer was identified as Terra Energy Center, an affiliate of Canada-based Flatlands Energy, 

The other would be built in Mount Storm, W.Va., by developer TerraSpark near an existing plant that produces 1.6 GW of power and uses carbon capture technology. Project cost was not disclosed but it will receive up to $18.5 million in federal funding.

Federal money for the new coal plants would come from funds that Congress originally designated for reducing carbon dioxide emissions from polluting industries, according to the New York Times.

Funds would also boost restart of the AES Warrior Run coal plant, a 229-MW facility in Cumberland, Md., that was shuttered in June 2024 as Maryland’s last operating coal plant. However, the utility filed last year with the Federal Energy Regulatory Commission for a restart due to need for electric capacity to support demand driven by data centers and other factors. Funding would also support restart of a coal plant in Puerto Rico.

The administration also said last fall it will open 13 million acres of federal lands for coal mining and provide $625 million to recommission or modernize coal-fired power plants. Analysts noted, however, that no new coal fired power plants have been built since 2013 and speculated also on project impacts in a potential political change of administration.

In addition, $75 million is designated to help build the Oakland Bulk and Oversized Terminal in Oakland Calif. on the site of a decommissioned U.S. Army base to boost export of up to 12 million tons of coal per year to Asia and other markets. Trump predicted that with work starting this year, the estimated $231.8 million facility could operate in 2028. But the terminal, pushed by the coal industry since 2010, already faces legal challenges in the San Francisco Bay Area. “The developers should expect an unrelenting uphill battle,” said Ben Eichenberg, a senior staff attorney at the San Francisco Baykeeper.

Together, the announced projects would support more than 14,000 jobs in coal, construction, rail and maritime industries, the White House claimed, as well as save $50 billion in power costs. The U.S. Environmental Protection Agency in February weakened limits on mercury and other toxic air emissions from coal-fired power plants, stating the action would reduce energy costs and improve grid reliability. 

“I am optimistic. The United States has a 400-year supply of coal, making it one of the most important resources for domestic energy security,” said Michelle Bloodworth, president of America’s Power, a coal industry trade group.

Opinions Mixed on Need for Coal

But a recent report from nonpartisan think tank Energy Innovation said 99% of all U.S. coal plants are now more expensive to run than comparable replacements by new solar, wind or energy storage infrastructure. 

In a survey last month of 36 major energy infrastructure investors by the American Council on Renewable Energy, none indicated any future plans to invest in coal infrastructure. “The market has already rejected coal as cheaper, cleaner alternatives continue to outcompete the most expensive, dirty fuel source," said Lena Moffitt, executive director of climate advocacy group Evergreen Energy,  

Under Trump’s orders, the Energy Dept. has also required coal-fueled power plants in Michigan, Indiana, Colorado and Washington state to operate past their planned retirement dates to meet demand, despite operators' claims of sufficient power capacity.

Lawsuits against DOE by Michigan, Illinois and Minnesota and by public interest groups claiming the agency exceeded its authority in issuing the orders, now have reached a federal appeals court in Washington, D.C.

A DOE lawyer told the court last month that the order directing the 1.5-GW Campbell plant in Indiana to stay online past its May 31, 2025, planned shutdown was based on “substantial evidence” of a grid emergency. But plant officials say operation has cost $180 million over the last year. 

Michigan Assistant Attorney General Lucas Wollenzien said DOE has not shown how a grid emergency exists. “if unchecked, [the order] would transform the structure of power for regulating resource planning, as it has been commonly understood for decades,” he added.

DOE’s other emergency orders delaying plant retirements affect: TransAlta’s Centralia plant in Washington; CenterPoint Energy’s F.B. Culley Unit 2 in Indiana; Northern Indiana Public Service Co.’s R.M. Schahfer plant in Indiana; Craig Unit 1 in Colorado run by Tri-State Generation and Transmission Association; and Constellation Energy’s Eddystone gas-fired plant in Pennsylvania. 

The Schahfer plant, built in the mid-1980s, cannot operate due to severe mechanical failures, faciilty officials have told DOE and grid officials. Its two active coal-fired generators are completely out of service, with operation not expected until October at the earliest as “significant boiler and turbine work” is ongoing, said the utiiity.

Northern Indiana Public Service has estimated that keeping the plant operating past its 2025 set retirement date will cost more than $1 billion through the end of 2027, but said the company can meet summer power demands with new wind, solar, and battery energy resources. 

A court decision expected later this year could set a precedent for the other pending legal challenges, although analysts expect the case will likely be appealed to the U.S. Supreme Court.