Our Economy: True Costs

Utilities, regulators and citizens across America are turning their back on coal. The reason boils down to dollars and sense.

Coal has traditionally been viewed as a cheap and abundant fuel, but a closer look reveals its true costs.

Since 2006 the cost of building a coal plant has increased 100% as a result of rising labor and resource costs. Santee Cooper has even recently raised its estimate of the cost of its proposed coal plant from $1 billion to $1.25 billion dollars -- and that is not likely to be the last price hike.

Meanwhile, the cost of coal mined from Appalachia has doubled since Santee Cooper first announced plans for a new coal plant in the Pee Dee. And, since Appalachian coal can only be reached by dynamiting mountaintops, we must decide which we value more: lumps of coal or ancient mountain ranges.

Another cost is climate change. Coal plants are among the biggest contributors to our warming globe. If we continue burning coal unchecked, the cost to the American economy could be at least $1.9 trillion dollars annually by the end of the century.

Fortunately, our federal legislators do intend to do something about global warming, and that will add even more cost to burning coal. If legislators add a price of just $20 dollars to every ton of greenhouse gas emitted by Santee Cooper’s proposed coal plant, it would result in a $200 million fee – every year. Most utilities have found this prospect too risky to face and have chosen to shelve their plans for coal.

That’s not all. If we could add up the bill for all the damage to our health and to our environment that coal is responsible for, it would triple the cost of a new coal plant. Unfortunately, the utilities don’t pay those costs – we do , in the form of higher electricity rates. Already, every utility in South Carolina -- including Santee Cooper -- has announced rate increases because of the rising price of coal. Building this coal plant will only insure higher electricity bills for South Carolinians for decades to come.

To learn more about the economic downside of coal, read the following study by TR Rose and Associates, a New York public policy consulting firm, which recently warned investors about the risks of Santee Cooper's proposed plant [Report on Santee Cooper Coal Plant Costs, pdf].