Two days ago the Pace consultancy reported financial projections on a “Quit Coal by 2014” scenario. In my view, Pace grossly underestimated financial risks associated with the current “keep coal” plan. Risks, which could send Austin’s coal costs skyrocketing. Nevertheless, even according to their estimates — getting out of coal completely by 2014 will cost ratepayers about 5% more per month…
Here’s a breakdown of the 2014 scenario:
1. Get out of the Coal Plant by 2014 (600 MegaWatts)
2. Replace it with 750 MegaWatts of local rooftop solar & 1,000 MegaWatts of energy efficiency
3. Will cost Austinites about 5% more than the current Austin Energy Gen Plan recommendations (keeping coal plant burning till at least 2020).
Let’s look at the bill increase:
The avg Austin residential electric bill is about $100 a month. A 5% incresase = about $5 per month.
How this nets out:
• We’d sever ties with coal’s “negative externalities”
including: 70% of the City’s greenhouse gas emissions, destructive strip mining, 100% of the City’s mercury pollution, slurry ponds, coal ash dumps and coal ash pollution, local particulate air emissions, regional water pollution, local water consumption, 1,030 asthma cases per year, 50 deaths per year, (and more). (1)
• We’d eliminate alarming financial risks
including: 1. our coal plant is a “clunker” (#7th most polluting industrial complex in TX), one of the oldest power plants in the state … reasonable assumption? it’s going to be expensive to maintain, 2. likely CO2 regulation could double coal’s costs locally, 3. potential Coal Ash regulation could add millions to our annual coal costs, 4. dependence on a volatile fuel market makes me queasy (Austin’s coal fuel costs went up 73% in 2008), 5. federal penalties due to being out of Ozone attainment (we were one day short of this penalty, Summer 2009). (2)
• We’d reestablish national leadership
Our City’s Climate Protection Plan (2007) states, “Austin will become the national leader in CO2 reduction.” Currently we aiming for compliance , not leadership. Quitting coal = instant climate leadership. What benefits to Austin’s quality of life and local economy would we gain by living up to our own mandate? (3)
• We’d eliminate huge, local health concerns
Important: Austin is “downwind” of its coal plant.
1. Mercury: In 2007 our coal plant released 88,773,103 pounds of toxic air pollutants, including: mercury, lead, cobalt, and dioxin. Our coal plant’s mercury emissions were #12th worst in the state, 2007. The plant is responsible for 100% of our City’s mercury emissions.
2. Asthma: According to the NRDC’s “Clean Air Task Force,” our coal plant’s pollution causes about 1,030 new asthma cases every year.
3. Children: According to Physicians for Social Responsibility, local coal emissions “damage cardiovascular and respiratory health and threaten healthy child development.” Trish O’Day (MSN, RN, CNS) (Clinical Instructor in Public Health Nursing at UT Austin) spoke out about this at the Sept. 23rd Energy Town Hall Meeting.
4. Early Deaths: According to Environment Texas our coal plant’s pollution causes about 44 deaths per year, according to the NRDC our coal plant’s pollution causes about 50 deaths per year. (4)
• We’d est. the foundation for a clean energy economy
Two key aspects of the 2014 scenario are: energy efficiency and rooftop solar. By investing in putting city money into installing thousands of solar panels and making thousands of buildings more energy efficient — instead of fixing an old clunker coal plant, over the next 10 years, Austin will create hundreds of jobs, from caulking to engineering.
• We’d have a clearer financial picture for rate payers
Wind, rooftop solar, and energy efficiency all have zero fuel costs. For customers big & small this means very little volatility in pricing. As we’ve seen with recent price surges in oil, coal and natural gas commodity prices, eliminating this volatility offers a more appealing financial picture, both for business planners and low income advocates.
• We’d be the change
Getting out of our coal plant means cleaning up Austin’s commerce, creating clean revenues for the City, and showing the world: you don’t need coal to run a world-class community.
The Question: How will we invest?
My CFO buddy tells me that in financial terms all of this comes down to a very appealing “risk premium” (aka, “risk insurance”). From his professional perspective, Austin needs to invest less in coal. (It’s too risky.)
Ask financial folks —
*For more detailed info on the following citations, please review the wall posts at our Facebook group, “Austin has a dirty secret.” http://tinyurl.com/yjpruvb
(1) Sources: Austin Energy, iLoveMountains.org, 60 Minutes (10/4/2009), The New York Times (et al), Environment Texas, PowerSmack.org, National Resources Defense Council (NRDC).
(2) Sources: Texas Commission on Environmental Quality (TCEQ), Neil Carman (PH. D.), Clean Air Program Director Texas Sierra Club, PowerSmack.org, 60 Minutes (10/4/2009), Daily Texan (6/24/09)
(3) Sources: Austin Climate Protection Program “Resolution” (Feb. 2007)
(4) Sources: TCEQ, Neil Carman / TX Sierra Club, others sourced cited in body.
Thanks to Chris Lowrimore, Mike Sloan, and Austin’s Quit Coal Coalition for help with this. Feel free to ask specific questions via the comments section. I’ll get back to you. Thanks, Chris