Keeping Coal is Paying Off

Rising U.S. electricity prices – up 40% on average since 2020 – are now a top-tier concern for American consumers, but not in Utah.

Instead of bills going up, Utahns could see a $375 million decrease this year. And a key reason is the state’s reliance on coal.

Coal is used to generate nearly half of Utah’s power, and the affordability and reliability of the coal fleet is proving a significant advantage. From 2013-2023 Utah, in fact, saw the largest electricity price decrease in the country.

Utah’s success in moderating electricity prices is quite a contrast to some of its neighbors. California, for example, saw electricity rates jump from 21 cents per kilowatt hour in 2013 to 30 cents in 2023. They’ve only continued to climb since. While California has spent a fortune on power lines and smart meters, the cost of generating power in the state also increased 40% between 2012 and 2024.

While industry has fled California’s soaring rates, power demand has steadily grown in Utah, including a notable uptick since 2020. Despite the growth and rising demand, Utah’s electricity prices have remained low. Affordable, existing coal generation has anchored the state’s power system.
In its latest Integrated Resources Plan, Utah’s Rocky Mountain Power and its parent company, PacifiCorp, extended the lives of several coal plants, citing soaring electricity demand and an improved regulatory environment.

Utah is hardly the only state where coal plants once scheduled for early retirement are getting new life. Just last week, Arizona Public Service (APS) announced it’s officially delaying the planned closure of the Four Corners Power Plant by seven years. Once scheduled to close in 2031, the plant will now run through 2038 and has a new coal supply contract with the Navajo Transitional Energy Co.

APS says it is pursuing the plant life extension to manage ballooning demand from a growing economy and an influx of large energy users, notably data centers. APS forecasts it will have to add 60% more generating capacity by 2038 to meet projected peak demand.

One after another, utilities from one side of the country to the other are punting on plans to close coal plants. The calculus is simple enough: closing well operating dispatchable capacity – to spend billions of dollars to replace it – when the nation is already facing power supply shortages, simply doesn’t make sense.

Investing in Affordability

Keeping coal capacity available, and even making targeted investments to improve plant efficiency and flexibility, is sound policymaking that puts consumers first.

To get a sense of just how much keeping existing coal capacity on the grid is saving consumers, consider the Department of Energy’s (DOE) analysis behind its efforts to invest in 13 existing coal plants. DOE believes that its investment of a few hundred million dollars to improve plant performance and operational flexibility is saving consumers approximately $50 billion that would have had to go to new power generation to replace it. The most affordable capacity – and the most readily available – is the capacity already on the grid.

The coal fleet is saving ratepayers billions of dollars, shielding them from fuel price volatility and the soaring costs of building new generation. Utahns know very well how affordable coal generation is. Californians can tell you just how much it costs to not have it.