Fossil fuels are on their way to becoming obsolete. Coal and oil are finite resources, and with a global population over 7 billion, supply simply can’t keep up with the demand for much longer. Still, the fossil fuel industry is so deeply embedded into the American government and economy, we give billions in subsidies each year to prop it up and suppress price.
It seems that King Coal’s tired motto of “cheaper and domestically-produced” might be on its last leg, however. A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) says that electricity produced by a new Peabody Energy coal-fired power plant is likely to result in a 40-100 percent rate hike for 2.5 million American utility customers.
The report, ”The Prairie State Coal Plant: The Reality vs. the Promise” [PDF] unravels the sordid tale of the Prairie State Energy Campus (PSEC): a 1,600-megawatt, coal-fired electrical power station and coal mine under construction near Marissa, Illinois. Peabody Energy promised utility companies and electric membership cooperatives in Illinois, Indiana, Kentucky, Michigan, Missouri, Ohio, Virginia and West Virginia that the plant would provide affordable, low cost electricity for the next 30-50 years.
However, the PSEC project is now behind schedule, well over budget (with construction costs estimated as high as $4.9 billion versus the original $1.8 billion projection), and not yet producing power as promised, according to the new report. The IEEFA estimates annual losses per community through 2025 will range from $3 million to $56 million.
Even worse is damning evidence that suggests Peabody Energy knew the coal-fired power plant would never deliver on its promises, and took action to transfer the costs from itself to the public. Until 2007, Peabody Energy was 100 percent owner of the project, but since then it has shifted 95 percent of its risk in the PSEC onto the backs of local communities and co-ops.
“The time has long since passed for Hoosier ratepayers to know the truth about Prairie State and for Indiana to end our love affair with coal and shift investments to energy efficiency and truly renewable resources, like wind and solar, which are cleaner, less risky, and far cheaper,” said Kerwin Olson, executive director, Citizens Action Coalition of Indiana.
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