Upgrade or retire. The choice for coal-fired plants under the Trump EPA’s new power sector proposal isn’t that different from what they faced under the Obama-era carbon controls the plan would replace.

But even with the Environmental Protection Agency’s attempts this time around to pave the way for more coal plant upgrades, many state regulators and utilities still may look to invest more of their dollars in cleaner burning natural gas and renewable energy instead.

That is because the reduced...