The cost of continuing coal power
UPHE member and retired legal and economic analyst for public utility regulators at the federal level, Malin Moench, had an excellent op-ed in the Deseret News. His op-ed highlights the costs, both financial and environmental, of delaying the modernization of our power grid.
Last spring, the legislature passed a bill that would delay Rocky Mountain Power’s (RMP) shift from coal to renewable energy. Last month, RMP proposed a 30% rate hike over the next two years. Although Governor Cox feigned shock, Malin Moench points out that the proposal shouldn’t come as a surprise, due to increasing cost of coal.
“Most of us realize that burning fossil fuels to produce electricity causes far more harm to human health and the environment than using wind and solar. However, few realize that coal-based electricity is much more expensive than electricity generated by renewables. Simply running an existing coal-fired plant now costs more than building and operating a nearby solar farm of equal capacity. The premium that utilities now pay to use coal rather than renewables averages 30% nationally, but is 50% for RMP’s Utah coal plants, according to national plant-specific cost data compiled in a recent study. From these data, we can calculate that RMP could avoid operating costs of $260 million annually by switching from coal to solar — savings large enough to pay for full battery backup for such solar facilities,” Malin wrote.
More from Moench’s op-ed:
Coal’s huge cost disadvantage reflects two things: 1) decades of rapid improvements in solar, wind and battery storage technology, and 2) hefty financial incentives that the Inflation Reduction Act offers for clean-power projects that utilities can commit to over the next two years.
Through 2026, the Inflation Reduction Act offers Rocky Mountain Power an opportunity to commit to modernizing its grid at a bargain price. If RMP took full advantage of it, it could cut Utahns’ future power bills nearly in half while stimulating large amounts of related capital investment in Utah’s economy. Companies developing artificial intelligence models, their hardware suppliers and other high power-consuming, high-tech businesses are searching desperately for large sources of clean, sustainable power to tap. They are likely to follow Meta’s example and build billion-dollar-plus data centers in our state if we can offer them adequate supplies of the clean, sustainable electric power they demand.
In a Salt Lake Tribune op-ed, Nate Blouin and Sara Baldwin estimated that if Rocky Mountain Power made full use of available Inflation Reduction Act incentives to convert its grid from coal to renewables, it could bring $15 billion in industrial diversification, job creation and tax revenue to Utah. These potential economic benefits dwarf our state government’s various economic stimulus efforts, such as those of the Utah Inland Port Authority. What’s more, the economic development that a clean power grid can be expected to stimulate would be truly sustainable, unlike plans that could produce diesel-powered, highly polluting freight traffic.
Economic forces are pressuring society to make the transition to clean, low-cost electric grids. Standing in the way of this win-win result are the vested interests of fossil-fuel-dependent businesses and the regulatory inertia that their political power guarantees. The bills that the Legislature passed and the governor signed last spring (HB191 and SB224) freed Rocky Mountain Power from any obligation to offer Utah’s ratepayers cleaner, lower-cost electric power if it discourages the continued burning of coal. The only reason cited by our legislative leaders for this was that it is more reliable than renewable power
Last year, the possibility arose that Utahns could be forced to shoulder the multi-billion dollar costs associated with Oregon’s 2020 wildfires, for which PacifiCorp was found liable. Putting Utah taxpayers on the hook for this bill is both unjust and alarming. This situation highlights a troubling connection between financial irresponsibility and environmental negligence, where corporate failures are potentially passed onto the public. Utah’s leaders must prioritize the protection of their constituents over corporate interests and ensure that the costs of environmental destruction are borne by those responsible.The legislature approved a bill that put Utahns on the hook for RMP’s bill.
Coal-fired power plants emit a toxic mix of pollutants, including sulfur dioxide, nitrogen oxides, and particulate matter, which contribute to respiratory illnesses, heart disease, and premature deaths. Transitioning to renewable energy sources is not just an environmental imperative—it’s essential for safeguarding public health and reducing the healthcare burden associated with pollution-related diseases.
What can you do?
Email the Public Service Commission (PSC) at psc@utah.gov.
