Coal can’t compete -- that’s the headline from a new report focused on PacifiCorp, a major utility in the western U.S. owned by billionaire investor Warren Buffett. PacifiCorp, which operates the largest fleet of coal plants in the West, is -- oddly -- still fiercely clinging onto coal power even though its coal plants can no longer compete with the cheap renewable energy that’s abundant across the West (and nationwide, which is why Trump keeps trying and failing to bail out coal plants). And that’s before taking into account the extreme health and environmental damage created by these asthma-causing, water-polluting, planet-warming coal plants, which has galvanized a national grassroots movement that’s moving the U.S. beyond coal.
A recently released independent analysis (commissioned by the Sierra Club) of PacifiCorp’s coal-burning power plants describes how the utility’s massive portfolio of coal-fired generation poses a significant financial risk to its customers. Conducted by an independent energy consulting firm, Energy Strategies, the report shows that half of its coal units are uneconomical compared with solar power or purchasing energy on the open market, and wind is cheaper than 20 of the 22 coal units. Replacing this coal power with wind power alone would save customers almost $3 billion!
Meanwhile, PacifiCorp assumes that almost all of its coal units will operate through 2030, and the overall costs of operating PacifiCorp’s coal plants through currently planned retirement is $11.7 billion! As the cost of coal power goes up and clean energy costs go down, these coal plants will pose a greater financial risk to customers.
This reality poses a fundamental question: Is PacifiCorp acting in the best interest of its customers when it holds on to coal plants and fails to choose increasingly least-cost and less risky resources, a switch it is refusing to make that would save its customers billions of dollars?
And another critical question -- with PacifiCorp betting so big on coal despite the dirty energy’s high costs -- how long until customers will be on the hook for bailing out the company’s bad business decisions?
Simply put, people don’t want to pay more for dirty energy, which explains both PacifiCorp’s secrecy about the economics of its coal fleet, and also Trump’s furious -- and so far futile -- attempts to bail out uncompetitive coal plants. Time is running out for this shell game that utilities like PacifiCorp have been playing, and those that embrace clean, renewable energy will be the winners in the 21st century.
On Warren Buffett’s watch, it’s time for PacifiCorp to take a hard look at its aging coal fleet and start committing to taking expensive, dirty coal plants offline and replacing them with clean energy. PacifiCorp is in its energy planning process now, so it’s the perfect time to commit to a thoughtful, just transition to move beyond coal. Buffett's companies need to start reflecting that addressing pollution and climate change goes hand-in-hand with better financial decisions. This is a great opportunity to demonstrate that leadership.