This blog was written by Steven Hayward and originally published on “The Enterprise Blog”
American Electric Power’s announcement last week that it will soon begin shutting down one quarter of its coal-fired power plants, combined with the news that replacing just a fifth of coal-fired power in Illinois could raise utility rates by as much as 65 percent over the next six years, is making the long-simmering issue of coal suddenly red hot. If the Illinois projections are true, it also appears to give the lie to the refrain that cap and trade, or other efforts to phase out coal, would be cheap and easy. On the other hand, there is something slightly odd about this story, as natural gas-fired power is now very competitive with coal on price. Shouldn’t we be able to replace coal with gas at a more reasonable cost than these news stories seem to suggest?