Let Coal Die a Natural Death – by Editorial Board (Bloomberg News – September 1, 2015)

http://www.bloombergview.com/

Coal-fired electricity is becoming ever less profitable. That’s the good news — or it should be, since it gives power companies greater incentive to embrace cleaner and cheaper sources of energy.

But not every energy company is content to let the market guide its decision-making. In a role reversal, at least one energy company is asking regulators to intervene to keep coal profitable for a while longer.

In Ohio, the Public Utilities Commission is considering a request from the Akron company FirstEnergy to have consumers cover the higher cost of electricity from three aging coal plants. (One of these just underwent a $1.8 billion pollution-control upgrade to comply with federal law.)

The aim is to keep the plants open for another 15 years. Under this plan, FirstEnergy ratepayers could spend $3 billion more than necessary for electricity, according to the Office of the Ohio Consumers’ Counsel, a state agency.

The strategy is similar to one FirstEnergy followed in West Virginia, when it got state approval to sell a coal-fired plant to its regulated subsidiaries, so that when the price of coal power became uncompetitive, the subsidiaries could secure an officially sanctioned rate increase. Earlier this month, they asked for a 12.5 percent rate rise.

Other energy companies aren’t so shortsighted. In Iowa, for example, MidAmerican Energy is investing $900 million in new wind farms that will enable the company to draw more power from wind than from coal. Iowans can look forward to years of low, stable electricity prices.

For the rest of this editorial, click here: http://www.bloombergview.com/articles/2015-09-01/let-coal-die-a-natural-death

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