Wisconsin Coal Plant Rejected for Staggering Costs

Here’s another sign that new coal plants face an uncertain future in America: The Wisconsin Public Service Commission (PSC) has unanimously rejected a plan by Wisconsin Power & Light (WP&L) to build a 300-megawatt coal plant along the Mississippi River on account of exploding costs -- costs that will increase even more from impending federal regulation of CO2 emissions.

It marks the first time in Wisconsin’s history that the state PSC has shot down a proposal for new coal -- and the first decision on a coal plant since Barack Obama’s presidential victory. Said Commissioner Mark Meyer in the AP:

This is the wrong project at the wrong time.

Over the past year, the construction costs of the plant ballooned nearly 60% percent, increasing from $777 million to $1.26 billion. At the time of the PSC ruling, it was the most expensive coal plant proposal in the nation per unit of energy.

But the real game-changer for the commission was factoring in the future costs of the plant in a carbon-regulated America. Commission Chairperson Eric Callisto explains in the PSC press release:

We are at a unique juncture in this country, and in Wisconsin, and decisions regarding new sources of electric generation need to account for the likely future costs of complying with constraints on carbon emissions. The costs of this plant in relation to its risk and the more affordable options currently available to Wisconsin Power and Light were important factors in my decision. Cheaper, cleaner options are out there, and I encourage the utility to move on them quickly.

WP&L fought for two years to build the plant. And in June, it announced it would burn renewable biomass for 20 percent of the plant's output to offset the emissions from coal. The commissioners didn't buy it. Said Commissioner Lauren Azar of that plan:

I saw it as smoke and mirrors.

WP&L has said an appeal is not likely. What now? The Milwaukee Journal Sentinel reports that the utility may instead upgrade one of its natural gas-fired power plants to produce more electricity, and expand its use of wind power.

Meanwhile, the Energy Center of Wisconsin has found that increasing investments in energy efficiency in the state between $75 and $123 million dollars per year over five years (for a total of $375 to million to $615 million), would wipe out the need for one new, average-sized coal plant.

All of which highlights two facts:

1. New conventional coal plants in the US are bad investments that will saddle ratepayers with skyrocketing electricity costs.
2. There are far more cost-effective and clean alternatives available all over the US, right now.

In other words, coal is not cheap and not needed. And that is why the Wisconsin decision wasn't the first -- but the 64th such coal rejection in America in two years. And why many more are expected to follow.

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