Understanding DOE Emergency Orders During Winter Storm Fern

Understanding DOE Emergency Orders During Winter Storm Fern

3/26/26

What Are the Costs?

There have been many headlines in Indiana this week about the U.S. Department of Energy’s (DOE) emergency orders to keep two Indiana coal plants running and what that might cost ratepayers. Unfortunately, many reports don’t provide the full context, leading to confusion about why these actions were necessary.

Why Were the Emergency Orders Issued?

In a February press release, the DOE explained that the orders were issued to maintain grid reliability during Winter Storm Fern, which put the nation’s electricity system under extreme stress. According to the release:

• NIPSCO’s Schahfer Coal Plant operated at over 285 megawatts every day from January 21–February 1.
• CenterPoint’s Culley Coal Plant operated at approximately 30 megawatts almost every day during the same period.

U.S. Secretary of Energy Chris Wright emphasized that these actions helped protect lives by keeping critical power online during dangerous winter conditions.

If a government official’s statement isn’t enough, the nation’s grid reliability watchdog agrees. During a congressional hearing last week, Jim Robb, President and CEO of the North American Electric Reliability Corporation (NERC), provided a stark assessment of Winter Storm Fern’s impact:

“The system ran very close to the edge, leaving no room for error.”

He went on to note that the DOE’s emergency orders, including keeping the Schahfer and Culley coal units running, played an important role in preventing grid failures during the storm.

What Does Grid Reliability Cost Ratepayers?

First, let’s consider what it didn’t cost. In 2021, Winter Storm Uri caused the Texas grid to collapse, leading to widespread outages and the tragic loss of more than 200 lives. The aftermath is still being felt today, with total costs exceeding $28 billion. This serves as a sobering reminder: the cost of inaction or insufficient grid reliability can be catastrophic.

Some recent headlines suggest that Indiana ratepayers will cover the full cost of keeping the Schahfer and Culley coal units online. In reality, these costs are shared across 11 states in the Midcontinent Independent System Operator (MISO) region, because all customers in the region benefit when power plants stay online during emergencies, not just Hoosiers.

Based on similar situations and the revenue these plants earned while running, the impact on NIPSCO and CenterPoint customers will be small and short-term. For most households, it will likely add only a few cents to a few dollars to their bills over several months.

The Federal Energy Regulatory Commission (FERC) carefully controls what costs can be recovered. They allow payment for incremental operating costs caused by the emergency orders, such as:

• Fuel costs
• Labor and staffing
• Variable operations and maintenance
• Start-up and cycling costs
• Extra environmental compliance expenses

FERC does not allow recovery of costs unrelated to the emergency, such as:

• Capital investments
• Long-term upgrades or life-extension projects
• Lost profits or return on equity

This ensures that customers only pay for what was necessary to keep the grid reliable during the storm.

In short, these emergency actions helped protect Hoosiers without putting a burden on their electricity bills, keeping the lights on safely during extreme winter conditions.

Why the Extension of the Emergency Orders?

You may have read about the DOE’s recent extension of the order to keep the two coal plants online. According to the press release announcing the extension:

The extension underscores that grid reliability is an ongoing concern, especially as the energy mix shifts toward renewable resources. Maintaining reliable, dispatchable generation, such as coal units, in emergency situations helps prevent outages, protect lives, and support economic stability.

Key Takeaways

• Winter Storm Fern tested the resilience of Indiana’s and the nation’s electricity system.
• The DOE’s emergency orders ensured critical power stayed online at Schahfer and Culley coal plants.
• Grid reliability was preserved, preventing potential outages during extreme winter conditions.
• Lives were protected, and communities avoided widespread disruption.
• Costs were shared fairly across the MISO region, so Hoosiers were not unfairly burdened.

As Jim Robb of NERC emphasized, the system “ran very close to the edge, leaving no room for error.” Emergency actions like these demonstrate the importance of maintaining a diverse, reliable energy mix that can respond during extreme events.