Millions of U.S. energy consumers across multiple are unwittingly propping up a coal industry by paying more than $1 billion annually over recent years for dirty energy that renewable sources could have provided at much cheaper prices.
According to a new study (pdf) published Tuesday by the Union of Concerned Scientists, which looked at consumer and market data from the last three years, residents across four major energy markets spanning large swaths of the country have been forced to pay higher rates for coal-generated electricity when less expensive and cleaner alternatives were available to utility companies in those regions.
“Every month, millions of consumers are unwittingly bailing out coal-fired power plants,” said Joe Daniel, study author and senior energy analyst at UCS. “When utilities started selling power on the open market, they did so voluntarily. In fact, some had to jump through hoops to do so. But now they seem unwilling to take advantage of the low prices in the markets they joined.”
While regulatory statutes dictate that utilities have a “least cost” obligation to their customers, meaning they provide them energy at the cheapest cost, Daniel says his research shows some are bucking those rules.
“If energy on the market can be purchased at a lower cost than operating the coal plants they own then they should buy that power and resell it to their customers,” he said. “But what my analysis found was that utilities are often depriving ratepayers of access to the lower cost, often cleaner power. Instead, they are selling customers electricity from their own, more expensive coal plants instead.”
The overall practice – especially given coal’s outized negative impacts on water and air water quality as well as its climate impacts – is, according to Daniel, “unacceptable and should not be tolerated.
“Customers are being ripped off while cleaner and cheaper sources of energy are being crowded out because utilities are forcing customers to subsidize coal plants,” he concluded. “What this study shows is that, in essence, customers are paying extra to put more global warming emissions into the atmosphere.”