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Economic Impact

New Industry

Poor air quality affects our local economy and our public health (especially the health of our children and the elderly.) Jefferson County’s air quality is designated by the EPA as being in non attainment with regard to air pollution. Until we clean our air, certain new industries cannot move into our community. The Jefferson County Health Department estimates our area has lost 15 manufacturing businesses (including the Mercedes plant) and $5 billion dollars in economic investments because of our non attainment status. In addition, there are hidden costs associated with the toll poor air quality takes on our public health including:

  • The costs to the health-care system.
  • The cost of lost productivity and absenteeism in the workplace and schools as a result of exposure on “bad air” days.
  • The economic damages of premature death.
  • The economic value of the pain and suffering of those who are ill.

A recent study by the National Academy of Sciences  estimates that the hidden costs of burning fossil fuels is costing our country up to $120 billion per year.

In addition, EPA estimates that when the new standards for ozone are put into place, our nation will save between $13 million and $100 million (determined by the final standard) by reducing premature deaths, hospital and emergency room visits, missed school and work days due to illnesses associated from exposure to ozone.

 

Your Electricity Bill

This summary is from an Arise Citizens’ Policy Project report,”Public Utility Regulation Without the Public:  The Alabama Public Service Commission and Alabama Power”. Read a full version of the report here.

There has not been a public rate case for the Alabama Power Company (“Alabama Power” or “the

Twinkle's PSC: Puppet Service Commission (JD Crowe, al.com)

Twinkle’s PSC: Puppet Service Commission (JD Crowe, al.com)

Company”) in 30 years. Instead, the Alabama Public Service Commission (“PSC” or “the Commission”) has a regulatory process that allows Alabama Power to adjust its charges each year without any public evidentiary hearings and, indeed, without any participation by rate paying consumers whatsoever other than off-the-record and after-the-fact comments at an informal hearing that completely lacks public transparency. In fact, the evidence is clear that the PSC specifically adopted this extreme rate-making process in the ’80s in order to protect Alabama Power from having to file for rate increases (as utilities in other states do) and to shield the process from public involvement and scrutiny. Moreover, the Alabama PSC allows Alabama Power to earn a rate of return of between 13.0 percent and 14.5 percent on the common stock investment made by its sole owner, the Southern Company. This return on equity range is significantly higher than other commissions around the nation allow their utilities to earn. For example, the average return on equity earned by utility operating companies like Alabama Power during the years 2008-2011 was only 9.40 percent or nearly 30 percent below the 13.27 percent return on equity earned by Alabama Power under the formula rate process followed by the Alabama Public Service Commission.

Only two other states with privately owned utilities have similar regulatory processes for electric utilities, Louisiana and Mississippi. However, in these states, unlike Alabama, there are meaningful opportunities for public involvement and ratepayer participation before major rate increases are approved.

 

Economic Costs of Coal

Electricity is vital to the modern world, and coal is the largest provider in the United States. The state of Alabama ElectricMeterrelies on coal for 36% of its electricity, more than any other source. We all want to pay as little as possible for our electricity, but it’s time we really examined the true cost of coal.

The human cost is the most devastating. As of 2011, the American Lung Association’s study of power plant air pollution  estimated a yearly death toll of 13,000. Coal-fired plants are by far the worst, spewing tons of pollutants into our air and water supply.  These plants are cause more air pollution than any other industrial source. The particles released from burning from coal are a major contributor in asthma and other lung related diseases, cutting lives short or subjecting the residents in the area to years of poor health and hospital bills.

To bring it closer to home, in this June 2012 article on al.com, Thomas Spencer outlines the cost of just one coal-powered plant in Greene County, AL in terms of human life. One plant in a fairly sparsely populated area that few people travel to is responsible for 49-100 premature deaths a year! This plant, like too many statewide, lacks controls for pollution that have become standard for cleaning our air.

Electricity from coal might lower your power bill. In the long run, it is never a bargain. Alabama needs to wake up and realize what we’re really paying for coal.

The following excerpt is from the executive summary of the Union of Concerned Scientists’ Report “Ripe for Retirement: The Case for Closing America’s Costliest Coal Plants”.  Read a full version of the report here.

For decades, coal has powered America. Coal mined from Wyoming to West Virginia is burned in hundreds of power plants across the United States to generate electricity. In 2011, approximately42 percent of our nation’s electricity was produced by burning coal (EIA 2012a). But today, more than three quarters of U.S. coal-fired power plants have outlived their 30-year life span—with 17 percent being older than half a century. Most are inefficient, operating far below both their power generation potential and the most efficient coal units on the power grid.
They lack essential modern pollution controls, so they damage public health. The sulfur they emit causes acid rain. The mercury they release poisons waterways and fish and causes neurological damage in children (EPA 2012). The soot they emit creates smog that causes lung disease, premature death, and triggers asthma attacks (EPA 2010a; NRC 2010). Burning coal demands billions of gallons of cooling water from vulnerable rivers and lakes, and leaves behind vast quantities of toxic ash residuals, while coal mining causes extensive and lasting damage both to human health and the natural environment (Gentner 2010; NRC 2010). Coal-fired power plants are also our nation’s largest single source of heat-trapping carbon dioxide (CO2) emissions, the primary contributor to global warming (EIA 2012b).
These well-documented drawbacks are reason enough to reduce the nation’s dependence on coal. Less widely appreciated is that many of these coal plants have reached the end of their useful life—it simply makes no economic sense to keep them running when cheaper, cleaner alternatives are available.
As of May 31, 2012, a total of 288 coal-fired generating units (a power plant comprises one or more generating units or generators) totaling 41.2 gigawatts (GW) of coal-fired generating capacity have been scheduled for closure; those power generators supplied 3.8 percent of total U.S. electricity used in 2009 (the most recent year of available data). The owners of these soon-to-be-retired generators have concluded that paying for costly upgrades to keep their outdated coal plants running is a bad investment—particularly now that there are many cleaner, lower-cost alternatives that can replace old coal units while maintaining the reliability of the electric system. Whether natural gas, clean renewable energy from the wind and sun, or cost-effective efficiency measures to reduce electricity use, energy options that are abundant, cheaper, and cleaner are making it harder for dirty coal to compete.

 

Health Costs

A recent article by Dr. Bonnie New, former director of Health Professionals for Clean Air, makes the case for a direct economic cost due to pollution:

“When we see the large impacts of pollution on health, it’s impossible not to notice the financial impacts as well.

The economic impact of preventable illness and death related to soot pollution in the U.S. is staggering, estimated in the hundreds of billions of dollars every year. The functional impact on the lives of those affected and their families is also dramatic.

As doctors, we deal with not only the challenges of diagnosis and treatment, but with the sadness, frustration and pain of people who can not live normal lives and children who can not enjoy just being kids.

It raises anger in physicians to hear from those opposing health-based air quality regulations on the basis that such regulations would be “too costly”. It’s not like the costs are avoided if regulations are not put into place. The costs are simply shifted to our patients, and to the health care system. The costs are paid for in lives impaired and lives lost, in kids who can’t run and play, in increasing hospitalizations and people missing work and school because they’re sick.

Shifting costs like this from polluters to the general public makes for healthy business profits, but sick and unhappy people. As patient advocates, doctors have good reason to be angry. The public, those current and future patients and families, do too.”