THE PROBLEM
Communities across the U.S. are fighting to retire fossil-fuel power, deploy more clean energy, and increase equity and affordability. Horizon Climate Initiative aids those communities and their advocates by empowering them to target an often ignored but pervasive problem: electric utilities running costly coal- and gas-powered plants when existing cheaper power is available in the market, then passing those losses on to captive customers.
By deploying overpriced fossil fuels---today mostly coal---ahead of lower-priced power, utilities create excess costs estimated at $1 to $2 billion a year as well as an annual average of 175 million extra tons of CO2. They pass those costs onto their ratepaying customers while propping up money-losing power plants and shoving existing cheaper, clean energy offline. This widespread practice, known as “uneconomic dispatch,” stands in the way of affordable energy, a level playing field for renewable power, and fossil fuel retirements.
Electric utilities operate their fossil plants uneconomically for a variety of reasons. But the primary motive is simply profits: the investor-owned utility fears that if it doesn’t run the plant enough to show that it’s useful, the state commission that is its chief regulator might terminate the company’s ability both to charge ratepayers for the plant and to make money off it for their shareholders. Shockingly, the utilities get away with this manipulation. They often are politically powerful players in their states and always hold more information about their operations than any other player, including the commissions themselves. In short, the utilities have the incentive and the opportunity to put their self-interest above the public’s interests.
We can change this..
THE SOLUTION
We must expose utilities’ hidden decisions to burn fossil fuels wastefully and shine a light on the impacts of this bad behavior. When we amplify the voices of ratepayers, communities, and businesses paying the price, and build urgency for regulators to rein in uneconomic coal operations, we can create regulatory pressure, market pressure, and public pressure for utilities to stop running fossil fuel power plants when they lose money for customers.
The impacts of winning this fight stretch from the immediate to the long term. As GHG levels continue to climb at near-record rates and energy burden increases, we can quickly deliver desperately needed relief for the climate, consumers, and communities downwind and downstream of the culprit plants. Eliminating the market manipulation that favors fossil fuels will foster broader systemic changes across the electricity sector, which will boost existing and new renewable power projects, pushing fossil energy further to the margins and leading to even deeper GHG reductions. Over the long term, by telling the story of how utility corporations are padding their profits and keeping the fossil fuel industry afloat by driving up rates for electricity, we will expand the group of consumer stakeholders who see the climate justice cause as their cause. We must disrupt the false industry narrative that clean energy is what’s causing rate hikes.
HCI and our partners have crafted an ambitious, multiyear campaign strategy. It weaves together technical and legal analysis and expertise, hard-hitting communications, public education, and direct engagement with decision-makers, amplifying the voices of impacted communities. To make this strategy go, we partner with consumer and energy justice advocates, community-based organizations and grassroots groups, experts and think tanks, watchdogs and good governance groups, clean energy buyers, environmental organizations, funders, and other voices and constituencies.
HCI sits at the hub of the overall strategy to end uneconomic fossil power by:
Working with thought leaders in the advocacy and philanthropic communities to design a national campaign strategy
Building relationships with smaller organizations that often represent the communities most directly impacted
Identifying the organizations best positioned to implement specific parts of the campaign strategy
Securing the funding to allow those organizations to do their work consistent with their organizational mission
Creating an effective coalition of the disparate advocacy organizations to ensure their work is mutually supportive
Adjusting the strategy and its implementation based on new developments and on-the-ground results
To fully implement our strategy, we are seeking direct or aligned funding and are excited to work with funding partners to resource this important effort. To find out more about partnership opportunities, please email frank.rambo@horizonclimate.org.