How can ratepayers and utilities best keep electricity prices affordable?
Coal is often touted as a source of low-cost electricity, but some believe that coal’s negative environmental impacts outweigh any such benefits.
Our analysis examines three different aspects of the cost of coal: coal’s impact on retail electricity prices, the estimated future cost of generating electricity with coal, and costs of coal generation not included in the retail price. By tracing changes in electricity prices in states that changed their energy portfolios we show that using more coal does not actually make power less expensive. States that reduced their use of coal-fired generators have not seen electricity prices rise, and states that increased coal use have not seen prices drop.
Also, the estimated “levelized cost” of constructing and operating a new coal plant today is more expensive than generating the same amount of power from a new hydro or natural gas plant, and is comparable to the cost of wind power. Finally, the cost estimates for coal-generated power fail to factor in the “externalized costs” of pollution cleanup, medical bills, and environmental damages borne by the taxpayers and the public. When these costs are included, coal-fired power is more expensive than all the other generation types we examined.