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Clean Wisconsin Pressroom

Monday, March 10, 2008, Wisconsin State Journal

Higley: Coal plants too risky for Wall Street, Wisconsin

By Charlie Higley
Executive director of the Wisconsin Citizens Utility Board

Alliant Energy wants to build a new coal-fired power plant on the shores of the Mississippi River near Cassville.

Perhaps it's no surprise that the Citizens Utility Board is opposing Alliant's plan. We believe another coal-fired power plant will unnecessarily increase electric rates and emissions of global warming pollution.

But maybe it is a surprise to hear similar concerns from Wall Street. Large investment banks Citigroup, J.P Morgan Chase, and Morgan Stanley are asking, "What's riskier: Placing bets on subprime mortgages, or financing coal-fired power plants?"

According to the banks, the answer is: "Financing coal-fired power plants." After losing tens of billions of dollars on bad investments in subprime mortgages, the banks do not want to take chances on coal-fired power plants.

The banks are telling utilities to prove the new plants will be economically viable, especially if the government regulates carbon dioxide, the leading cause of global warming pollution. Apparently, these large banks believe that government regulation of global warming pollution is inevitable. Coal-fired power plants are the largest sources of global warming pollution in Wisconsin and the United States.

When the government regulates global warming pollutants, then the cost of making electricity from coal-fired power plants would go sky-high. High production costs could make it difficult for utilities to pay off the loans from the banks.

Instead of using coal, the banks are asking utilities to look at meeting power needs with energy efficiency and renewable energy. Coincidentally, CUB is asking the same questions.

Alliant's power plant proposal is being reviewed by state agencies, including the Public Service Commission of Wisconsin, which will decide by the end of 2008 whether Alliant can build the plant.

Just like Wall Street, we believe that building new coal plants would be a bad investment for Wisconsin ratepayers and the environment. Alliant should scrap its coal-plant proposal, and continue making smart investments in energy efficiency, wind power, and other renewable technologies that don't have the costs and risks of coal. If Alliant Energy won't take our advice, then maybe they will listen to Wall Street.

Higley is executive director of the Wisconsin Citizens Utility Board.