Does coal face an uncertain future in Wisconsin?

By JR Ross

State utility regulators made clear their decision to reject a proposed power plant in Cassville was not based solely on the fact it would generate the majority of its power from coal.

But they also seemed to have as many questions about coal's future as anyone else.

The decision to reject the plant was the latest in a series of blows coal has taken in Wisconsin lately and created some uncertainty over what's next for the dominant source of the state's power. One thing driving some of the immediate uncertainty is the likelihood of new limits on carbon emission as part of the effort to battle global warming.

Gov. Jim Doyle has set goals for reducing greenhouse gases in Wisconsin, while a task force he created on global warming pushed for new caps on such emissions. And with President Obama now directing the country's energy policies, many expect a nation-wide approach to reducing carbon emissions.

Taken altogether, some say that paints a difficult picture for any proposals to build a new coal-fired power plant in the near future here.

Carbon regulation

"We need some regulatory certainty with carbon," said Brett Hulsey, an environmental consultant who supported the Cassville plant.

Coal is - and will likely remain for the near future - Wisconsin's main source for energy, producing just less than 70 percent of the state's power. Nuclear energy is a distant second at less than 20 percent, according to the Public Service Commission.

It's also a major source of pollution in the state, which was on the minds of PSC commissioners when they rejected the Cassville plant.

Commissioner Mark Meyer made clear he was not "closing the door" to voting for a coal-fired plant down the line. But he and fellow commissioners also raised concerns about how the Cassville facility would fit in with state goals to cut greenhouse gas emissions.

Alliant Energy, which proposed the plant, had pledged to generate up to 20 percent of the plant's power from biomass, as well as other steps to lessen the facility's impact on the environment. But those steps didn't go far enough to ease commissioners' concerns.

They also had major questions over the $1.3 billion price tag for the proposed plant on the Mississippi River. The PSC's final order outlining its decision noted agency staff "offered evidence that this would be the most expensive conventional coal plant of its size, on a dollar-per-kilowatt basis, ever proposed in the United States."

The order noted the ruling "does not reflect a Commission policy in opposition to coal-fired or other fossil fuel generation." But it also outlined commissioners' concerns over carbon emissions, the cost to mitigate them down the road with likely caps on greenhouse gas emissions coming and other perceived shortcomings.

There is no question efforts are under way at the state and federal level to put new carbon emissions in place. But what those limits make look like is still up in the air.

Doyle appointed a task force on global warming in 2007 to propose steps to combat climate change. It laid out interim targets of reducing greenhouse gas emissions to 2005 levels by 2014 and 1990 levels by 2022. It also targeted a 75 percent reduction from 2005 levels by 2050.

Recommendations

The panel's recommendations, released last summer, included a "substantial reduction over time in the state's dependence on fossil fuels and, in particular, on coal-fired generation that does not include carbon capture and sequestration technology."

Carbon capture and sequestration technology is still being tested, and the report noted. The task force report also expressed support for a federal cap and trade program, which would put a limit on emissions that drops over time.

It also encourages the state to continue pursuit of a regional cap and trade program through the Midwest Governors Association.

With some of those details to be worked out, Hulsey said he sees moves in the immediate future toward renewable energy, a focus on efficiency and retooling coal plants to burn natural gas. "I see the climate for energy efficiency and renewables probably better than ever," he said.

Charlie Higley, executive director of the Citizens' Utility Board, said there are a number of trends working against coal right now that will make it hard to get a new coal-fired plant built in the near term.

He said growing demands for coal in developing countries like China are likely to push prices higher.

"Any of it is going to make it more expensive in the long run, and that's going to make it difficult for utilities to justify using coal," said Higley, whose group opposed the Cassville project.

Alliant spokesman Rob Crain said the decision on the utility's Cassville plant amounted to a "short-term blow" to coal's immediate future with the uncertainty over carbon costs and other factors.

The conversation now is focused on the best way to meet the state's energy needs in an affordable manner, and coal remains part of that discussion even if there is some short-term uncertainty over it, he said.

The Cassville project was the only application for a new coal-fired power plant pending before the PSC late last year. But Milwaukee-based We Energies has two coal-fired plants in Oak Creek that are scheduled to come on-line at the end of 2009. They cost $2.3 billion.

JR Ross is editor of WisPolitics.com. 

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