Benefits of the “Quit Coal by 2014 scenario” — #5. Lower Health Costs

The chart pictured shows Austin's coal plant causes $200 to $300 million in health costs -- every year. (1) That's according to a recent report commissioned by U.S.

The chart pictured shows Austin’s coal plant causes $200 to $300 million in health costs — every year. (1) That’s according to a recent report commissioned by U.S. Congress, completed by 20 leading economists at the U.S. National Research Council.

Background
The National Research Council (NRC) is a U.S. Congress chartered non-profit. Their report, “Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use” was released earlier this month in pre-publication form for public consumption. (2) The NRC is under the umbrella of the National Academies. From their press release,

“The report assesses what economists call external effects caused by various energy sources over their entire life cycle. Because these effects are not reflected in energy prices, government, businesses and consumers may not realize the full impact of their choices.  When such market failures occur, a case can be made for government interventions — such as regulations, taxes or tradable permits — to address these external costs.”

How This Relates to Austin
Austin Energy’s Staff Recommendation for Energy Planning, 2010 to 2020, in no way takes this metric, these costs, or these effects into account. (3) Austin Energy’s current plan assumes no financial responsibility for the negative effects burning coal 2010 to 2020 will have on our economy and our health. This economic rabbit hole, according to the National Research Council, will cost Austin area residents somewhere in the range of $1.5B to $3B during the next 10 years. Generally speaking, area poor will be the most severely impacted.

In bill payer terms, these costs reflect an average increase of well over $0.03 per kilowatt hour (that’s an NRC calculation), making the annual cost of Austin’s coal nearly twice that of West Texas wind. Furthermore, if Austin were to replace its coal plant with a flat, industrial, solar rooftops program, as suggested by Mike Sloan and the “Quit Coal by 2014” scenario — annual capital costs on 30 year financing to purchase and install said clean electricity would be less than Austin’s annual coal fuel expenditures, 2010 to 2020, as projected in the current electricity plan; operations and maintenance would be presumably lower as well; fuel costs, health care impacts, and exposure to federal regulation risks would be … zero. (4) I’m not making an attack here. The City’s assignment to Austin Energy was to create a plan, which specified “no plant closures before 2020.” But, think about it! It costs Austin less to go clean than to stay dirty — and it’s less risky, and it invests in the local economy, and it creates less volatile electricity pricing and better health… Shouldn’t Austin seize these opportunities now? Why wait? With the Quit Coal scenario — Everybody wins: big employers, low income customers, health care advocates, faith and social justice advocates, politicians, enviros like me, and our very dedicated utility stewards. Maybe our new City Council should re-write Austin Energy’s assignment?

Austin’s Coal Plant is located in La Grange, TX – just two counties east of Travis (in Fayette county). We are “downwind” of the plant’s total emissions. Austin’s coal plant is often called “Fayette Power Plant” (FPP), it provides 1/3rd of Austin’s total electricity, we run 1/3rd of this plant’s total capacity. Austin co-owns its coal plant with the LCRA. (5)

When to say When
Note that cleaning up Austin’s coal plant costs big $$. Perhaps we should be asking when to get out of this investment? The Obama Admin is bearing down on dirty coal in four areas: ozone, CO2, greenhouse gasses, and coal ash with costly regulations in the works. Reports like the one from the NRC suggest there will be more to come.

Austin’s coal is only going to get more expensive.

Austin Energy recently committed $230M+ of your money to installing “new scrubbers,” which will bring the plant into compliance with current clean air standards, not future ones. Dr. Neil Carman, Clean Air Program Director for Texas’s chapter of the Sierra Club, tells me this ambitious scrubber install will move our coal plant from #7th worst polluter in the state to approximately #50th by 2012 out of 2,045 industrial complexes surveyed. (6)

For more on this see my series at the Burnt Orange Report:
http://www.burntorangereport.com/user/chris_searles

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Notes
> 1. Image taken from “Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use,” National Research Council, pg. 67 — http://www.nap.edu/catalog/12794.html. (Downloading this chapter of the report costs $4, whole report $43, contact me for a free copy.)
> 2. National Research Council — http://sites.nationalacademies.org/NRC/index.htm
> 3. Austin Energy’s Staff Recommendation — http://austinsmartenergy.com/ (look in left margin, “Recommendation & CO2 Plan” to download). Currently the city’s planning analysis omits numerous community impact costs, as well as numerous financial risks related to continuing to run Austin’s coal plant. More on that to come…
> 4. Powersmack.org, “Coal Fuel Costs are Rising” shows Austin’s annual coal expenditures over 1999 to 2008 (10 years) to average out at $46/$47M per year — http://powersmack.org/coal-fuel-costs-are-rising/. Note that the Pace analysis Austin Energy is using to guide its planning forecasts coal fuel prices for Austin, 2010 to 2020, to be about $61M per year. … More: … A local solar install project costing $750M might deliver 750 Megawatts of ‘variable’ energy. Combined of course with more energy efficiency (demand reduction, those rooftops would help replace our coal plant’s 600MW of ‘reliable’ energy, now. Note — if the solar install portion of this project were financed according to each annual install, let’s say 150 MW of installation per year for 5 consecutive years, with interest rates @ 7% (a VERY high rate in today’s market, btw), the annual debt service would average aprox $44M per year, $16M lower than Austin’s annual coal fuel expenditures as projected in the current electricity plan. Please also note that some of the solar install’s capital costs might be further reduced by Obama-era clean energy incentives. Contact me if you’d like to “see my math.”
> 5. Austin’s portion of this 10 square mile complex is also referred to as “Sam K. Seymour Generating Station.” Read more via the LCRA’s website — http://www.lcra.org/energy/power/facilities/fayette.html
> 6. Note that the LCRA likes to promote this improvement as helping the plant to achieve a “high environmental standard.” Survey by the Texas Commission on Environmental Quality.

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