Coal Plants Earned $1 Billion For Knocking Cheaper Midwest Wind Offline

CARMEL, IN – New analysis commissioned by the NRDC (Natural Resources Defense Council) shows that customers throughout the central United States paid more than $1 billion in excess energy costs and lost out on nearly 400 megawatts of wind capacity between 2021 and 2023 because of practices that allow coal plants to rig power markets and crowd out cheaper resources.  

Adding to a growing field of research, the new report “The Consumer and Environmental Costs from Uneconomically Dispatching Coal Plants in MISO,”reveals new details about the impact of aging, uncompetitive coal plants taking advantage of utility and market rules to run at a loss for extended periods of time while crowding out cleaner, cheaper resources in the nation’s largest geographic grid region. 

“Customers shouldn’t have to pay higher bills to keep dirtier, more expensive coal plants online,” said Dana Ammann, policy analyst at the Sustainable FERC Project at NRDC. “Grid operators need to stop this inefficient practice and make these plants compete on a level playing field.” 

For years, experts have drawn the same conclusion: expensive coal routinely runs while losing money, saddling customers with excess costs in the process. Uneconomic dispatch happens for a number of reasons that all come back to coal owners' ability to supply power to the grid more or less at their own discretion - regardless of cost or rules.

The new research, conducted by Grid Strategies for NRDC and based on publicly available power plant data, shows for the first time that uneconomic coal not only runs when it should not, but cuts the line to push cleaner, cheaper resources out of the market. The excess costs harm consumers throughout the MISO power grid – a 15-state territory running from through the middle of the nation – but are most significant in Louisiana, Indiana, and North Dakota. 

“Power markets should ensure the cheapest resources are used first, but these loopholes increase profits for coal companies and utilities at the expense of energy consumers,” Ammann said. “These decisions have ripple effects. When uneconomic coal plants displace wind and solar power, it sends a signal to reduce future development of those projects. Coal plant operators shouldn’t get a bailout from customers.” 

NRDC (Natural Resources Defense Council) is an international nonprofit environmental organization with more than 3 million members and online activists. Established in 1970, NRDC uses science, policy, law and people power to confront the climate crisis, protect public health and safeguard nature. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Beijing and Delhi (an office of NRDC India Pvt. Ltd).