Fitch: Ruling will limit use of coal for power
NEW YORK (AP) — Fitch Ratings said Thursday that a federal appeals court ruling upholding greenhouse-gas-emission rules will limit the use of coal to generate electricity and make it unlikely that new coal-fired power plants will be built.
Fitch said the ruling could hasten the shutdown of some older coal-fired plants.
The use of coal to generate electricity has been under pressure already because of competition from cheap natural gas. Some utilities have switch fuels in their power plants.
On Tuesday, a three-judge panel of the U.S. Court of Appeals in Washington upheld Environmental Protection Agency regulations designed to reduce gases blamed for climate change. The rules will cut emissions of six gases produced by power plants, factories and vehicles.
Coal-burning plants produce more of those gases, such as carbon dioxide and sulfur dioxide, than do plants that run on natural gas. The coal industry has struggled to find a cost-effective way to catch carbon dioxide before it escapes into the air.
Fitch said the court's ruling would increase U.S. use of other fuels, especially natural gas.
The ruling will make construction of new coal-fired plants unlikely and "further strain the operations of older, smaller coal-fired plants already struggling" to meet anti-pollution rules, the agency said. "Many of these plants may be prematurely retired."
Most of the older plants are in Pennsylvania, Ohio, Indiana, Illinois and Michigan, Fitch said. It said the effect on bondholders would vary depending on the plants' locations, state rules and rates, debt and other factors.