Reliance on coal forces another company into bankruptcy
Midwest Generation’s Fisk plant in Chicago.
Oh, is it Monday? Ah. Well, then, there must have been another coal-reliant company filing for bankruptcy. Let’s see … yup, here it is.
The parent company of Midwest Generation, owner of some of Illinois’ dirtiest coal plants, has (as predicted) filed for bankruptcy protection. From Reuters:
Edison Mission Energy, a power company that operates in Illinois and several other U.S. states, has filed for Chapter 11 banktruptcy protection as it tries to restructure about $5 billion in debt. …
Edison Mission Energy has suffered as the 2008 recession cut power demand. Wholesale power prices have also fallen with cheaper natural gas, making it harder for Edison’s coal-fired plants to remain competitive.
If this surprises you: Welcome to Gristmill! Clearly it’s your first time here.
But it never hurts to offer a recap.
Below, you can see what electricity generation in the United States has looked like over the past decade. That dip in 2009, one of the two bankruptcy factors cited above, may not look like much, but it was a decrease in production of 4 percent — a massive drop.
It’s that transition away from coal, though, that is the more obvious shift. Here’s the percentage of electricity generated by coal versus natural gas, year-over-year.
Not included: 2012, when natural gas briefly matched coal’s output percentage.
Fans of coal (all of whom work for the coal industry or the Republican party) suggest that it is government regulation that’s spurring coal’s decline. It isn’t. I mean, the EPA’s standard limiting soot only came out on Friday.
What’s killing coal — and companies like Patriot Coal and Edison Mission — is the market, a market that for years was weighted heavily to coal’s benefit.
There is good news for Edison Mission. In a few years, it will be just one of many coal-reliant companies that closed its doors. Hardly exceptional at all.
Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.
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