The argument for energy markets is simple: Competition drives down electricity prices and spurs innovation. Unfortunately, a new Sierra Club report, Playing With Other People’s Money: How Non-Economic Coal Operations Distort Energy Markets, shows that not everyone in these energy markets is playing fair.
This peer-reviewed analysis of coal-fired power plants operating in markets across the United States finds that many coal plants in market regions are regularly operating uneconomically and more than market signals warrant. In fact, from 2015 to 2017, the captive customers of coal-owning regulated utilities operating in competitive wholesale energy markets lost $3.8 billion dollars due to the non-market-dictated operations of coal plants, a practice that continues today. Ultimately, this practice reduces competition, leaves captive utility customers vulnerable to excessive and unnecessary charges, and denies customers the benefits of less expensive electric power.
Additional resources:
- PDF of the report, Playing With Other People’s Money: How Non-Economic Coal Operations Distort Energy Markets
- Press release about the report
- Blog explainer #1: Regulated coal's shell game
- Blog explainer #2: When regulated coal cheats, everybody loses
- Blog explainer #3: Leveling the playing field