Gambling with Coal

Coal power plants release the most global warming emissions of any source of electricity. A growing consensus, which even includes business and utility executives, expects that Congress will regulate global warming emissions in the next few years. Utilities that ignore these coming regulations are heedlessly subjecting their investors and customers to the financial risk that comes with burning coal—which will be much more expensive in the future. Today, utility companies have a choice between investing in outmoded pulverized coal technology or investing in new, cleaner, and innovative efficiency and renewable energy technologies that don’t face increasing fuel costs or pollution charges. Those that choose to ignore the coming regulation on global warming emissions will face higher costs in the future and will likely try to pass that extra cost onto customers through higher rates.

Although a number of forward-thinking utilities have recognized the coming costs of carbon regulation, many have not. Because this carbon risk is not included into their planning, their estimated costs for future coal-generated electricity are deceptively low. In fact, once the global warming pollution costs of coal are taken into account, clean energy alternatives, especially wind power and energy efficiency, become an even more appealing option.