Fossil fuel generation is coming under increasing scrutiny as alternatives gain acceptance with Wall Street financial institutions.
In a revolutionary statement issued by three major investment houses last week, Citigroup, JP Morgan Chase and Morgan Stanley released their “Carbon Principles” and “Enhanced Diligence Process.” They consider these to be global warming “guidelines for advisors and lenders to power companies in the United States.”
Citigroup released a statement to the media declaring: “… [I]f high carbon doxide-emitting technologies are selected by power companies, banks have agreed to follow the Enhanced Diligence process and factor these risks and potential mitigants into the final financing decision.” Indeed, the clear implication, as pointed out by Environmental Leader’s The Executive’s Daily Green Briefing, is that coal plants without carbon capture and sequestration will be highly frowned upon.
Yet this is the road down which Indiana is heading. Two plants have been proposed without carbon capture and carbon sequestration: Duke Energy’s proposed coal gasification plant at Edwardsport and Indiana Gasification LLC, the ultimate location of which is anyone’s guess.
Not only are the design of these plants completely irresponsible from an ecological standpoint, they are miserable financial investments. The only way they can be built is with massive outlays of ratepayer and taxpayer dollars. State legislation already passed, and more now under consideration (Senate Bill 223 and House Bill 1117), would force the construction of these less-than-astute investments with ratepayer and taxpayer dollars.
Citizens Action Coalition suggests that Duke and Lucadia (the East Coast firm attempting to construct Indiana Gasification LLC) drop the machinations to make ratepayers and taxpayers financial cannon fodder for enhancing their profit margins with sham investment strategies and listen to the rational voices among the public and private investment community.
The rational approach put forth by the Wall Street investment firms is energy efficiency first, followed by renewable energy and less polluting decentralized power generators like combined heat and power projects at industrial facilities. The more risky investments like coal and nuclear are last in the hierarchy.
Why put energy efficiency and renewable energy first? Because, unlike investments in coal and nuclear plants, they are ultimately less risky investments, create more jobs and address global warming in an economically viable way.
The bottom line is that the new generation of coal plants is not financially viable and researching and developing carbon capture and sequestration technology for new or existing plants with ratepayer dollars, as envisioned in HB 1117, will cost billions of dollars, a price tag Indiana ratepayers can ill afford.
Many homeowners are unhappy with their property tax bills. If HB 1117 or SB 223 passes, their utility bills will soon rival or exceed their tax bill, if not the case already. Providing utility service with financially sound resources like energy efficiency and renewable energy is paramount for addressing our economic and environmental needs.
Grant Smith is executive director of the Citizens Action Coalition. He can be reached at email@example.com.