Reliability, Renewables, and Regulation: Conflicts in U.S. Energy Policy
In May 2025, the U.S. Department of Energy (DOE) issued an emergency order under Section 202(c) of the Federal Power Act, which allows the DOE to require temporary operation of power plants during grid emergencies, to keep the Eddystone Generating Station in Pennsylvania operational, despite its scheduled retirement. [1] The DOE cited concerns about potential grid instability, but this action, sparking immediate legal challenges from environmental groups, including the Natural Resources Defense Council (NRDC), the Sierra Club, and the Environmental Defense Fund (EDF). [2] The move brought into sharp relief the collision between the need for grid reliability during an energy transition and the uncertainties in the legal frameworks governing generation and environmental compliance. Although Pennsylvania’s transition from coal and natural gas to renewable energy is sound from an environmental and policy viewpoint, gaps in federal and state regulations create legal uncertainty about how to maintain both grid reliability and environmental compliance. These uncertainties are evident in the interaction of federal mandates and state energy laws, highlighting the complexities of regulating power plants during the transition to a cleaner grid.
Federal emergency orders, such as the DOE’s directive under section 202(c) under the Federal Power Act (FPA) to keep coal plants operational, reveal uncertainties in the scope of federal authority over energy reliability during the energy transition away from fossil fuels. Under section 202(c) of the FPA, the Secretary of Energy may “require by order temporary connection of facilities, and generation, delivery, interchange, or transmission of electricity as [...] will best meet the emergency and serve the public interest” when “an emergency exists by reason of a sudden increase in the demand for electric energy, or a shortage of electric energy, or of facilities for the generation or transmission of electric energy, or of the fuel or water for generating facilities, or other causes.” [3] The statute is intended for urgent grid-crisis circumstances; however, recent DOE orders appear to stretch this authority to planned retirements of generation facilities, raising questions of statutory interpretation and federalism. [3] For instance, in June 2025, a coalition of environmental organizations in Michigan filed a motion to intervene and seek rehearing of the DOE Order No. 202-25-3 that declared an energy shortage emergency, arguing that the DOE exceeded its authority by using section 202(c) to deny a facility’s planned retirement, rather than responding to a sudden, unforeseen emergency. [5, 6] This dispute demonstrates a legal gap: the statute's language implies short-term, unforeseen emergencies, but the DOE appears to apply it in contexts of long-term transition planning and grid-adequacy concerns. The regulatory uncertainty is exacerbated by the fact that the DOE regulations implementing section 202(c) define emergency with a narrow aim to assist “during a period of unexpected adequate supply of electricity” and emphasize that the authority is not meant to replace utility planning. [7] Because the transition from fossil to renewable generation involves planned retirements and evolving grid architecture, not sudden catastrophes, the federal legal framework is being stretched into new territory without clear precedent. The outcome is that plant operators, grid regulators, and states must seek answers to the following questions: when can the DOE issue a section 202(c) order? What triggers qualify “emergency?” How does that order interact with state retirement decisions and environmental laws? Without clearer judicial interpretation or legislative updating, this area remains a legal grey zone, highlighting a challenge at the federal level in governing generation reliability during the energy transition.
Moving inward from the federal level, state-level energy regulations, as managed by the Pennsylvania Public Utility Commission (PUC) under the Alternative Energy Portfolio Standards (AEPS) Act , face difficulties in integrating renewable energy sources while maintaining grid stability, exposing gaps in coordination with federal mandates. The AEPS Act requires Pennsylvania utilities to gradually increase the share of electricity generated from renewable sources and empowers the PUC to regulate compliance, including eligibility rules and interconnection standards. The act states, “the electric energy sold by an electric distribution company or electric generation supplier to retail electric customers in this Commonwealth shall be comprised of electricity generated from alternative energy sources and in the percentage amounts as described.” [8] This framework gives the PUC authority to integrate renewables, but can create tension with federal mandates that prioritized short-term grid reliability. In D.N. Hommrich v Commonwealth of Pennsylvania Public Utility Commission, the petitioner challenged PUC regulations implemented under the AEPS Act, contending that the agency exceeded its rule-making authority. The Pennsylvanian Commonwealth Court held that certain PUC rules, particularly those involving maintaining the regular, operational use of facilities, were invalid to the extent they added eligibility conditions not required by the AEPS Act, although it upheld other procedural rules under PUC’s narrow technical authority. [9] This case illustrates the legal risk regulators face when attempting to integrate new renewable technologies while preserving reliability and grid interoperability. At the same time, the PUC must ensure that its actions align with both state legislation and the realities of grid operation, especially where federal mandates or emergency orders might intervene. The coordination problem becomes acute when, for example, a federal order might require a fossil plant to continue operating, while state policy under the AEPS Act aims to accelerate retirement and renewables integration. If the PUC lacks clear legal authority to mediate these overlapping regimes, or if its rules conflict with federal mandates, the regulatory framework becomes unstable. Furthermore, the overlapping layers of jurisdiction trigger preemption concerns, as federal law under the FPA may preempt conflicting state regulation when the federal purpose is dominant. For plant operators and state utilities, this means uncertainty concerning what conditions a state regulatory decision can be overridden by a federal emergency order and should the PUC calibrate its rules in light of possible federal intervention. These are deficiencies in the state-federal coordination of energy law during a transition, pointing to a structural deficiency at the state regulatory layer.
Finally, environmental compliance adds another layer of legal complexity, as overlapping federal and state laws compose overlapping and sometimes conflicting requirements on generation facilities, deepening potential uncertainty during the energy transition. Allegheny Energy, et al. v. Spitzer, et al. serves as a sharp example, as multiple states sued Allegheny Energy under the Clean Air Act (CAA) for emissions violations, illustrating how fossil-fuel generation is subject to multiple layers of state and federal environment regulation while operating under utility and grid mandates. For example, the court notes, “new sources or modified existing sources must meet technological technology-based emission control standards and apply for preconstruction permits,” and a major modification includes “any physical change in or change in the method of operation of a major stationary source that would result in a significant emissions increase of a regulated New Source Review (NSR) pollutant under the CAA and a significant net emissions increase of that pollutant form the major stationary source.” [10] These overlapping requirements translate into tangible and significant compliance burdens, as operators must continue to track and report emissions, maintain and upgrade pollution-control equipment where required, satisfy state alternative-energy procurement rules, and ensure that modifications (physical or operational) do not effectively constitute major modifications under NSR and New Source Performance Standards - the pollution emission limits set under the CAA. At the same time, a federal DOE 202(c) emergency order, such as the one keeping the Eddystone plant operational, may require continued or even increased generation even when state-level mandates or AEPS- driven requirements would otherwise restrict it due to the changes in operation procedure and increased pollutants, creating dimensions between federal reliability directives and state. The residual risk is that operators or regulators cannot reliably predict how these layers will interact, especially as technology evolves (such as in energy storage, smart grids, and renewables) and planned retirements proceed. The regulatory gap here is one of integration, as reliability mandates, clean-energy policy, fossil-plant retirements, and environmental compliance must be reconciled in a coherent legal framework. Without clearer delineation, the transition may trigger unintended legal conflicts, undermining the very reliability objectives it aims to secure.
The energy transition underway in Pennsylvania is both inevitable and sound from a technical and environmental perspective. Yet, its legal underpinning is significantly less secure. The three aspects analyzed–federal emergency authority under 202(c) of the FPA, state regulatory authority via the PUC and AEPS Act, and overlapping environmental compliance regimes – all reveal regulatory gaps and resulting legal uncertainty. These deficiencies matter in practical terms, as plant operators, utilities, regulators, and states cannot reliably predict when or how federal orders will prevail or defer, or how environmental compliance will tie into reliability mandates. The result is a legal limbo during a time of critical infrastructural transformation. Addressing these uncertainties is not just about clean energy policy, it is about ensuring a legally coherent and trustworthy framework that can guide grid reliability decisions, investment planning, and regulatory oversight. Clarifying federal-state interplay, delineating triggers for emergency orders, and harmonizing environmental reliability and clean-energy mandates are essential steps if Pennsylvania is to avoid systemic energy failures during the transition.
Edited by Ewa Siemiatkowskia and Andrew Chung
[1] U.S. Department of Energy, Order No. 202‑25‑8: Emergency Order Pursuant to Section 202(c) of the Federal Power Act (Washington, DC: U.S. Dept. of Energy, August 28, 2025).
[2] Natural Resources Defense Council, Sierra Club, and Environmental Defense Fund, Motion to Intervene and Request for Rehearing of DOE Order No. 202‑25‑3, U.S. Department of Energy, June 18, 2025.
[3] U.S. Department of Energy, Order No. 202‑25‑8: Emergency Order Pursuant to Section 202(c) of the Federal Power Act (Washington, DC: U.S. Dept. of Energy, August 28, 2025).
[4] Natural Resources Defense Council (NRDC), Petition to the D.C. Circuit Court of Appeals to Review Decision of Eddystone Generating Station (September 2025).
[5] U.S. Department of Energy, Order No. 202‑25‑3 (May 23, 2025).
[6] Sierra Club v. DOE (Public Interest Organizations), Motion to Intervene & Request for Rehearing and Stay of Order No. 202‑25‑3 (June 18, 2025).
[7] U.S. Department of Energy, Regulations Implementing Section 202(c) of the Federal Power Act, 10 C.F.R. § 205.370 (2025).
[8] Pennsylvania General Assembly, Alternative Energy Portfolio Standards Act, Act of Nov. 30, 2004, P.L. 1672, No. 213, 73 P.S. §§ 1648.3(a)(1), 1648.5.
[9] D.N. Hommrich v. Commonwealth of Pennsylvania, Pennsylvania Public Utility Commission, No. 463 M.D. 2022, Order at 1 (Pa. Cmwlth. Aug. 13 2025).
[10] Allegheny Energy Supply Co., LLC v. Spitzer, No. 1:05‑cv‑00004 (N.D. W. Va. Aug. 12, 2010).