DC Circuit Decision Emphasizes Limits on DOE’s Emergency Grid Authority

That is the practical significance of the DC Circuit’s decision vacating the US Department of Energy’s (DOE) order requiring continued operation of the J.H. Campbell Generating Plant in Michigan. In People of the State of Michigan v. U.S. Department of Energy, the court treated Section 202(c) of the Federal Power Act as an emergency backstop — not an end around state, utility, and regional planning processes — and applied the post-Loper Bright rule that courts independently decide the scope of agency authority.

The dispute arose against a broader federal push to treat electric reliability as an energy-security issue. In April 2025, the Administration issued an executive order on strengthening the reliability and security of the US electric grid and invoked a declared national energy emergency. This context encouraged the DOE to view Section 202(c) not just as a storm-response or wartime tool, but instead as a mechanism for keeping generation available where retirements, weather risk, fuel constraints, or infrastructure weaknesses are expected to produce reliability problems.

For Campbell, the DOE’s order was motivated by Campbell’s pending retirement in a constrained regional market. The legal question was whether Section 202(c) allowed the DOE to override the ordinary institutions that usually manage those risks by using an “emergency” order for an initial period of 90 days. Over time, the DOE extended it four times and compelled Campbell’s continued operation for 450 days.

The Campbell order was also not an isolated use of emergency authority. The DOE issued or extended a series of Section 202(c) orders involving aging thermal or reliability-critical facilities in different regions, which helps explain why the Campbell decision matters beyond the involved Michigan plant. For example:

Section 202(c) Is a Backstop, Not a Parallel Planning Process 

The result is a potential template for the next Section 202(c) fight as many of the DOE’s recent orders are predicated on similar facts.

The court’s analysis turned less on isolated words than on statutory structure. Section 202(a) promotes voluntary regional coordination; Section 202(b) permits Federal Energy Regulatory Commission (FERC) compulsion at a state, transmission-entity, or utility request after notice and hearing; and Section 202(c) gives the DOE direct authority only in an emergency. Together, according to the court, those provisions make Section 202(c) a last-resort tool, not a parallel planning process for keeping plants online whenever national energy policy favors doing so.

That limitation matters even against the executive order backdrop. A national energy emergency may set federal priorities and direct agencies to examine their tools, but it often does not expand those tools. According to the court, when a retirement has been addressed through an integrated resource plan, state commission order, RTO study, and replacement-capacity plan, the DOE must explain why those processes still leave an immediate, unmitigated gap.

Why DOE’s Showing Fell Short 

The DOE first pointed to possible summer 2025 shortfalls. But the same North American Electric Reliability Corporation materials identified adequate anticipated resources for Midcontinent Independent System Operator (MISO) peak load conditions, and MISO auction results showed sufficient capacity with a reserve margin above target.

The DOE did not need to prove outages were certain. But, according to the court, it did need to define the asserted emergency — its severity, timing, location, and likelihood — and explain why other tools would not work. The record identified several alternatives, including transfers, load-modifying resources, emergency alerts, conservation, state emergency authority, and a possible Section 202(b) request to FERC. The court was not persuaded by the DOE’s generalized reliability concerns.

The DOE’s five-year rationale was weaker still. According to the court, multi-year risks usually belong to integrated resource planning, capacity procurement, accreditation reform, and transmission planning. The court left room for a future risk to require action now but advised that the DOE connect that future harm to an immediate federal need. A planning horizon is not necessarily an emergency.

Loper Bright Shaped But Did Not Compel the Result

The opinion also illustrates post-Loper Bright review. The DC Circuit did not ask whether the DOE had offered a permissible interpretation of an ambiguous statute; it independently sought the “best” reading of Section 202(c), testing the DOE’s position against text, neighboring provisions, federal-state authority, historical practice, and the DOE’s own regulation.

Loper Bright v. Raimondo does not mean agencies always lose or that expertise no longer matters. (A deeper discussion of Loper Bright is here.) Courts can still uphold agency action when statutory text gives the agency room to exercise technical judgment.

Campbell fell on the other side of that line. The case concerned the boundary of the DOE’s authority, not just the quality of a reliability forecast. Once the court read Section 202(c) as an immediate, last-resort power, the DOE could not prevail by invoking expertise or reframing longer-term concerns as an emergency.

The court also used agency history against the DOE. It cited nearly a century of limited Section 202(c) use, the DOE’s 1981 emergency regulation, and the agency’s prior statement that emergency orders were not meant to replace prudent utility planning. Under Loper Bright, longstanding executive practice can inform statutory meaning; here, it cut against the DOE’s broader reading.

The decision provides no universal playbook for reliability disputes. Instead, the decision counsels that utilities threatened by a Section 202(c) order should expect review to focus on whether the DOE identified a concrete emergency and explained why ordinary reliability tools were inadequate for that emergency.