For More Information:
Contact: Virginia Cramer, 804-225-9113 ext.
102 or Cyrus Reed, 512-477-1729
TX Consumers Could See Significant Rate Increases
Federal Government Jeopardizes Billions in Loan Repayment by Authorizing Risky Energy Projects
(Austin) -- The Sierra Club today voiced its
concern that consumers could be faced with
higher electric bills if the federal government
continues to approve unsound investments in
new coal-fired power plants across the nation.
Already burdened with $36 billion in unpaid
loans, the U.S. Department of Agriculture is
now allowing rural utilities to take on billions
of dollars in additional debt to build risky
new coal-fired power plants, at enormous financial
risk to taxpayers. Among those rural utilities
is Brazos Sandy Creek
Electric Cooperative,
which already has requested $478, 317,000.00
in loans or loan guarantees from the federal
government.
“With federal climate change legislation
imminent whoever wins the presidency, the customers
of Brazos Electric Cooperative are being asked
to assume huge environmental and economic risks
by investing in the Sandy Creek plant. The
plant will spew out some 1800 tons of nitrogen
oxide pollution, further dirtying the air in
the Austin, Dallas-Fort Worth, and Waco areas.
It will also emit some 7.5 million tons of
carbon dioxide subject to federal carbon controls – increasing
the costs to ratepayers by tens or even hundreds
of millions per year,” said Cyrus Reed,
Conservation Director for the Lone Star Chapter
of the Sierra Club. “The
fact that the Rural Utility Service (RUS) is
lending federal money to electric co-ops to
build coal plants without looking at how impending
carbon legislation will increase plant costs
is a travesty.”
The federal government, through the Department
of Agriculture’s Rural Utilities Service,
is approving rural utilities’ ownership
in Sandy Creek and at least nine other new
coal-fired power plants proposed by various
rural utility cooperatives across the country.
In every instance the government has failed
to fully vet the plants’ potential impacts
before authorizing their construction, ignoring
key concerns like the financial risk associated
with the coal plants’ contribution to
global warming, adverse impacts on the environment
and the availability of cleaner, cheaper alternatives.
The government’s failure to fully evaluate
the environmental risks of and alternatives
to these new coal-fired power plants violates
the National Environmental Policy Act.
Environmental impacts play an integral role
in a utility’s ability to repay its loans,
a fact recognized by the nation’s largest
banks, which already consider the cost of carbon
dioxide pollution before granting loans. Other
parts of the federal government, including
the House Oversight Committee have also recognized
the financial risks associated with failing
to account for the cost of global warming pollution
from new coal plants. The Committee has warned
the Rural Utilities Service that future carbon
regulations will make coal increasingly costly
and that failing to consider those costs will
place taxpayer dollars and ratepayers at risk.
In the past rural utility cooperatives have
gone bankrupt rather than pass on cost increases
to customers. If that were to happen in this
situation, the American taxpayers will be left
with billions of dollars in debt which is unable
to be repaid.
“Coal is a fuel of the past. We should
be working to move beyond it to a cleaner energy
future. There are real, affordable energy solutions,
like already available efficiency measures
that can be implemented and renewable energy
such as wind, solar, and geothermal power.
These clean energy solutions are ready today
to meet our energy needs, without the financial,
health and environmental risks associated with
coal,” said Laurie Vanhoose, Texas’ Associate
Regional Representative for Sierra Club’s
National Coal Plant Campaign.
