New Power Act Gives FERC Authority to Force Plants to Stay Open and Exempts Them from Environmental Law

The newly introduced Power Plant Reliability Act of 2025 is a major shakeup for how the nation’s electricity grid is regulated. This bill hands the Federal Energy Regulatory Commission (FERC) significant new power to intervene in interstate electricity service, specifically granting it the authority to compel power plants to keep running if FERC decides service is or will become "inadequate." This intervention is designed to boost grid reliability, but it comes with some serious trade-offs, particularly concerning environmental oversight.

The FERC Reliability Hammer

The core of this bill amends Section 207 of the Federal Power Act, giving FERC the ability to order a public utility to provide "proper, adequate, or sufficient" electric service. If a state commission or a Transmission Organization complains, FERC can hold a hearing and, if it agrees, it can require the continued operation of a specific electric generating unit. Think of it like this: If a utility planned to shut down an aging, expensive plant next year, but FERC decides that plant is essential to keep the lights on in five states, FERC can simply order it to stay open for up to five years, with the possibility of five-year extensions. FERC must also determine how the costs of this mandated operation—which could be substantial—are allocated and recovered, likely meaning rate adjustments for consumers.

The Five-Year Retirement Warning

To prevent sudden grid shocks, the bill also establishes a strict new rule for plant owners. If you own or operate a generating unit with a capacity of 5 megawatts or more connected to the bulk-power system, you must notify FERC and affected state commissions at least five years before you plan to retire it. This is a massive runway, designed to give regulators and grid operators plenty of time to plan for replacement capacity. The only exception is for retirements caused by an unplanned catastrophe or emergency. For the average ratepayer, this is intended to prevent the kind of unexpected power shortages that happen when a large plant suddenly goes offline without a replacement ready.

The Environmental Liability Shield

Here’s where the bill gets complicated and potentially controversial. If a utility is ordered by FERC to keep a plant running, the bill includes a sweeping compliance protection clause. Any action or omission taken to comply with a FERC order under this section is not considered a violation of any Federal, State, or local environmental law. Furthermore, the party is shielded from related liability, penalties, or citizen suits.

What does this mean in practice? If FERC orders an older coal plant to stay open for another five years to ensure reliability, and the continued operation causes that plant to violate state air quality standards or federal water discharge limits, the utility is completely protected from enforcement or lawsuits related to those violations. This essentially elevates FERC’s reliability mandate above existing environmental regulations, removing a key tool—citizen suits—that local communities often use to hold polluters accountable. For communities living near these older plants, the trade-off for grid stability could be five or more years of mandated, protected pollution.