November 13, 2025 - A jump in natural gas costs has spurred several U.S. utilities to lift coal power output and cut back on gas-fired generation so far this year, reversing a years-long trend of lower coal use and emissions in the country.

While the trend has been a national phenomenon, six states - Arkansas, Indiana, Michigan, Ohio, South Carolina and Wisconsin - will play a more prominent role in determining the future trajectory of U.S. coal use if natural gas prices keep climbing.

That's because these six key states have roughly equal-sized generation shares from coal and gas within their electricity mixes, and so have the capability to replace one fuel with the other whenever market conditions dictate.

With U.S. wholesale natural gas prices up 44% from a year ago and close to testing multi-year highs, additional coal-for-gas switching is likely in areas where utilities are under pressure to keep power bills in check even as demand rises.

Gas Price Inflation

Benchmark U.S. natural gas futures have averaged around $3.57 per million British thermal units (mmBtu) so far in 2025, according to data from LSEG.

That compares to a $2.47/mmBtu average in 2024, and means that heavy gas consumers have been hit with a steep jump in commodity costs in 2025 even as lowering prices has become a major focus of nearly all U.S. authorities.

To cut costs, several utilities have opted to burn more coal instead of gas, as U.S. coal prices this year have averaged around 20% less than gas prices and have risen only 7% from 2024's average, data from LSEG shows.

Total U.S. coal-fired electricity production through the opening seven months of the year increased by around 16% from the year before, Ember data shows, reflecting the broadly higher coal use across the country.

Over the same period, U.S. gas-fired generation declined by around 4%, in response to some of the cost-saving efforts underway at several utilities.

The Key 6" States

There have been several states that have both increased their coal use and decreased their gas consumption by far more than the U.S. average, and so have had an outsized impact on national coal and gas consumption trends this year.

Combined coal-fired generation across Arkansas, Indiana, Michigan, Ohio, South Carolina and Wisconsin - the "Key 6" states - increased by 26% so far in 2025, while their collective gas use has dropped by 9%, Ember data shows.

Coal use in these states was particularly strong during the opening months of 2025, when gas prices underwent a steep year-over-year climb and spurred those utilities with both coal and gas generation assets to tilt output in favor of coal.

Arkansas, Michigan and Wisconsin all slashed their year-over-year gas-fired generation totals by well over twice the national average, while also sharply boosting coal-fired output to multi-year highs.

With gas prices already close to their highest levels since 2023 and rising due to higher use for heating and strong demand from LNG exporters, cost-sensitive utilities are likely to step up coal-for-gas switching in the months ahead.

Emissions Toll

Higher coal burning within utility generation mixes will lead to a fresh swell in overall U.S. power sector emissions.

Coal-fired generation in the U.S. emits roughly 950,000 metric tons of CO2 per terawatt hour (TWh), compared to around 550,000 tons per TWh from gas-fired generation, Ember data shows.

Despite this, the pressure to keep costs in check will likely sustain the trend of cutting back on gas use when gas prices climb, while plugging any resulting generation shortages with increased coal-fired production.

The heightened federal support for coal-fired power and coal mining will also maintain the momentum in favor of coal and provide utilities with some political cover against consumer pushback against a coal revival - at least over the near term.

Over the longer run, sustained increases in coal pollution alongside the retirements of decades-old coal plants will force utilities to cut coal power output again, especially as the scale of renewables generation and battery storage expands.

But for the coming months at least, coal-fired output across the Key 6 states - and more broadly - looks set to keep growing.