Thursday, April 30, 2009

Operating Coal Plants are Getting More Expensive

In November the EPA said coal-fired power must limit CO2 emissions. Earlier this month, the EPA began the process of putting this policy into place.

From the Washington Post...

The Environmental Protection Agency today plans to propose regulating greenhouse gas emissions on the grounds that these pollutants pose a danger to the public's health and welfare, according to several sources who asked not to be identified.

The move, coming almost exactly two years after the Supreme Court ordered the agency to examine whether emissions linked to climate change should be curbed under the Clean Air Act, would mark a major shift in the federal government's approach to global warming.

This action by the EPA, that occurred during the Bush administration, is probably one of the main reasons Alliant decided to drop plans to build a coal-fired power plant in Marshalltown. Alliant knew the costs of running coal plants would be increasing, but didn't know how much.

From Michigan Liberal...
The costs to building new coal plants, already up compared to a couple of years ago thanks to the rising costs of construction materials, will go up also, either because the utilities will need to invest in clean coal technology (which doesn't exist right now in the market) or to buy carbon credits to make up for the excess pollution. Neither is cheap, and the costs for both will be passed along to rate payers.
When the Iowa Utilities Board agreed to a 10% return on investment after Alliant asked for a 12.5% return, Alliant knew they would be unable to pass the cost of this increase onto customers.

Iowa, like Michigan, depends on electricity from coal plants. Now is the time to chart are path for our future energy needs. State leaders need to continue to strongly push renewable energy and need to announce that coal is going to be a declining part of our energy future.
This state can either acknowledge that federal action on this is imminent, or it can continue to pretend that an energy plan crafted last year remains relevant in terms of today's political and economic environment. The costs of coal are going to go up, and the federal carbon program is aggressive enough, it's not unimaginable that the costs for coal could pass on their way up the declining cost for renewable energy, made cheaper thanks to improvements in producing technology and the electrical grid.
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