Who Pays for the Hidden Costs of Coal?

The Public Utilities Commission of Ohio is still deciding whether to approve bailouts for FirstEnergy’s and Dayton Power & Light’s (DP&L) old, inefficient coal plants. The Ohio-based utilities want their customers to shoulder the costs of keeping these unprofitable coal plants running.

Coal plants aren’t cheap to operate. And as natural gas, wind energy, and solar energy have become increasingly affordable in recent years, coal can’t compete anymore. Moreover, subsidizing coal plants is not just a matter of higher electricity bills. We need to take into account the hidden costs of coal, which we all have to pay.

Health costs

Coal pollution harms human health and the environment. The American Lung Association reports that people’s breathing difficulties, including asthma, chronic obstructive pulmonary disease, bronchitis, and lung diseases, are worse when forced to breathe dirty air from coal plants. Coal plant emissions also cause heart attacks, strokes, cancer and birth defects. Lowering pollution from coal plants, on the other hand, can save lives.

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Climate costs

Coal pollution also contributes to climate change, which economists report will result in global costs of $1.2 trillion annually. This includes the costs for health care, premature deaths, harm to our food and water supply, and damage to our economy. We all pay for these costs in the form of higher taxes, higher health insurance premiums, higher food and water costs, repair costs for catastrophic weather events, and higher costs for goods and services.

Clean-up costs

Another area of hidden costs is the clean-up costs. The residue from burning coal is known as coal ash. Utilities bury millions of tons of coal ash in the ground at their power plants, which are often located on rivers to receive coal supplies on barges. The coal ash is stored in underground dams that can break and infiltrate the water supply.

Clean energy resources like wind, solar, and energy efficiency do not spew pollution into the air, meaning they do not lead to the high health or economic costs imposed by dirty coal power.

In 2014, a Duke Energy coal dam collapsed, spewing thousands of tons of coal ash into the Dan River. Duke Energy spent $15 million in direct cleanup costs and paid $102 million in fines and additional cleanup costs. Fortunately, Duke Energy is the largest utility in the country and is well capitalized, so Duke Energy’s shareholders – rather than its customers – had to pay these costs. But that’s not always the case with coal ash spills – some utilities leave customers with the bill.

Coal mining also produces toxic waste, including heavy metal residue from mining and deadly chemicals used for processing the coal. Another disaster occurred in 2014, when a pipe broke at a coal treatment plant, leaking 10,000 gallons of a deadly chemical into the Elk River in West Virginia. For days, the water supply was toxic for the 300,000 residents of Charleston, and the companies responsible paid a $151 million settlement for clean-up costs. Area residents and businesses also incurred $61 million in economic losses.

Bankruptcy costs

Coal plants keep losing money, causing financial stress for the industry. Large companies like Duke Energy are not always available to pay for clean-up costs. Many coal mining companies have filed for bankruptcy in recent years, including Arch Coal, Alpha Natural Resources, and Peabody. When these bankruptcies occur, taxpayers are left to pay for the clean-up costs.

For example, when Peabody filed for bankruptcy, the company filed claims for $2.7 billion worth of clean-up costs in the states where it operated mines. Peabody was allowed to emerge from bankruptcy by agreeing to pay $1 billion in clean-up costs. Taxpayers will pick up the tab for the remaining $1.7 billion.

Water costs

As part of the energy-water nexus, different power sources require different amounts of water, and coal plants use a lot of water. Meanwhile, climate change stresses the U.S. water system and enhances the likelihood and severity of drought.

Coal plants also discharge millions of gallons of extremely hot water into our lakes and rivers, killing fish and destroying their habitats.

The upside of clean energy

Clean energy resources like wind, solar, and energy efficiency do not spew pollution into the air, meaning they do not lead to the high health or economic costs imposed by dirty coal power. There is no toxic ash or residue left to clean up at a wind turbine. If a solar company files for bankruptcy, customers won’t be saddled with millions in clean-up costs. Finally, wind, solar, and energy efficiency require virtually no water to make power.

By subsidizing utilities to keep running their old coal plants, we all pay today in the form of higher energy bills. And we will all pay again tomorrow, when we pay for the hidden health, economic, clean-up, and water costs. With all these costs, and all the benefits of clean energy, why in the world should Ohio customers subsidize FirstEnergy and DP&L to keep operating their old coal plants?

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One Comment

  1. Bob Meinetz
    Posted April 17, 2017 at 11:36 pm | Permalink

    John, you don’t mind if I call you “EDF John” for clarity, do you? Because I see EDF is now trying to disguise their pro-methane message by identifying its propagandists by name, instead of by organization.

    Tsk, tsk. Let’s find out why.

    You wouldn’t happen to be a beneficiary in any way, shape, or form of the $18 million EDF has received from Shell, Chevron, Transcanada, Exxon-Mobil, and other oilcos for its “methane research” efforts? Because in 2017, I find an 839-word article about energy, lacking any mention of the “n” word (n-nu-nuclear) – rather odd. You see, when leading climatologists have come out strongly in favor of zero-carbon nuclear – now going mano a mano against the very companies which have given so generously to EDF – your org’s pro-methane perspective sounds more defensive of profit than the environment.

    In fact, the more one learns, the more EDF’s “studies” sound like anti-environmental propaganda:

    “Once the studies began, nearly everyone involved had to sign non-disclosure agreements…’The information in the EDF studies is much more tightly controlled’ than usual, said Robert Jackson, a Stanford University earth science professor who is part of three methane studies. ‘It’s very unusual for a foundation to give you funding as a researcher and make you sign a non-disclosure agreement. … I think it’s partly sensitivity. It’s partly corporate involvement. It’s partly controlling the message.‘”

    “…Nine natural gas operators provided 90 percent of the funding, as well as access to company property so that researchers could take measurements at well sites…”

    “‘The regulations [Colorado laws requiring monitoring of gas wells] were just another public pacifier,’ said Shane Davis, a Colorado-based fracking activist. ‘Grassroots communities have gotten so astute on who the enemy is. It’s not just the governor that supports fracking. It’s not just the industry. [b]It’s these people who come in in sheep’s clothing, but are wolves, like EDF.[/b] EDF should stand for “environmental defense fraud.” They’re absolute sellouts.’”