DOE Releases Final Resource Adequacy Report under Executive Order 14262

On July 7, 2025, the U.S. Department of Energy (DOE) released its Resource Adequacy Report, Evaluating the Reliability and Security of the United States Electric Grid, pursuant to a mandate in Executive Order 14262, Strengthening the Reliability and Security of the United States Electric Grid. The E.O. directs the Secretary of Energy to ensure that any generation resource designated as “critical” within an “at-risk” region remains operational, including by use of emergency powers under section 202(c) of the Federal Power Act (FPA). The DOE’s July 7^th report introduces a uniform national methodology for assessing regional reliability risks and identifying “at-risk” regions. While the report does not create new legal obligations, these designations may be used to justify future federal intervention in regional planning and generation retirement decisions.

Overview of Methodology Applied

DOE uses a deterministic model that simulates hourly grid performance under fixed assumptions through 2030 across 23 regions. They modeled three scenarios, (1) the Current System (2024 baseline), (2) Plant Closures (with announced retirements + Tier 1 additions), and (3) No Plant Closures (Tier 1 additions only). Key assumptions include:

• A 50 GW national increase in data center/AI-driven demand by 2030, based on midpoint projections from EPRI and LBNL.

• 51 GW of non-data center new load allocated regionally using S&P Global’s market forecasts and NERC data.

• Data set is derived from historical weather years (2007–2013, 2019–2023).

To evaluate reliability, DOE applied two key benchmarks:

• Loss of Load Hours (LOLH) is no more than 2.4 hours/year.

• Normalized Unserved Energy (NUSE) is ≤ 0.002% of annual energy demand left unmet.

Regions exceeding either threshold were deemed "at risk,” and a technology-neutral "perfect capacity" metric is used to quantify how much new capacity would be needed to restore reliability.  

Key Findings

• Highest-Risk Regions: PJM, MISO, SPP, and ERCOT—all face systemic challenges, particularly if retirements proceed as planned.

• Moderate-Risk Regions: CAISO and SERC could require targeted interventions under severe load growth or extreme weather.

• Low-Risk Regions: NYISO and ISO-NE stand out for maintaining reliability across all scenarios.

While the report offers a clear framework for assessing grid adequacy, several aspects deserve a closer look:

1. Historical Weather, Not Future Risk. The model relies on weather data from 2007–2013 and 2019–2023. This may understate the risks posed by increasingly frequent and severe climate events like multi-day heatwaves or deep winter storms—especially as grid stress patterns shift with changing weather extremes. Moreover, flood and drought years will impact the reliability of hydropower sources in the models.

2. Planning Metrics Used as Emergency Justification. DOE applies conservative planning thresholds (2.4 hours of LOLH, 0.002% NUSE), but these are typically used for long-term planning, not as triggers for emergency federal action. Using them to justify “at risk” classifications that further trigger interventions under the Federal Power Act may stretch legal limits.

3. Assumes No Aging of Infrastructure. The model treats all non-retired generation as fully available through 2030. That assumption may overstate reliability, particularly for older coal and gas units nearing end-of-life, which often face declining performance and increased outage risk.

Conclusion

This modeling provides DOE with the data to begin designating regions “at risk,” and potentially identifying generation resources as “critical.” However, while the report’s findings may support short-term retention of specific resources, they do not implicitly authorize indefinite retention or broad suppression of retirements. Any use of emergency powers under section 202(c) of the Federal Power Act to mandate continued operation of fossil fuel units would still have to meet the requirements of the Federal Power Act and could be barred by other legal principles:

• Under FERC’s Order No. 202-25-3 and the Federal Power Act, emergency orders like those applied to the Campbell Plant are strictly limited in duration and scope. The DOE must demonstrate an actual, time-limited emergency and show that the continued operation of a specific unit addresses a quantifiable risk and best serves the public interest.

• Long-term use of FPA § 202(c) beyond emergency durations remains legally dubious and likely triggers the major questions doctrine. Efforts to broadly reinterpret “emergency” to justify extended federal control over the energy market, absent clear congressional authorization, likely exceed the DOE’s statutory authority and could face judicial invalidation.

• To satisfy the Administrative Procedure Act, DOE must maintain an administrative record for any future decisions retaining aging fossil fuel resources. The “perfect capacity” shortfall metric does not identify technology type; it merely quantifies need. Relying on it to prefer coal or gas over cleaner alternatives may be arbitrary and capricious, absent further justification.

For more information, please contact Thomas Rudebusch.

Article By DWGP Summer Associate Adriana Chavez – UC Davis School of Law, May 2026