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A Fair Transition for Midwest Coal Counties

, lead Midwest energy analyst | May 4, 2021, 6:00 am EDT
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Across the country, including here in the Midwest, we are transitioning away from coal as a fuel source. While this brings important emission reductions and new opportunities for clean energy development, we still don’t do a great job supporting communities and workers who directly affected by the transition away from coal.

A new report by UCS and the Utility Workers Union of America (UWUA) aims to address this need. Entitled Supporting the Nation’s Coal Workers and Communities in a Changing Energy Landscape, the report offers comprehensive and affordable policies to support coal-dependent workers, their families, and their communities adjusting to a changing energy landscape.

Additionally, the analysis identified 462 counties (out of a total of 3,142 counties or county-equivalents in the United States) that have a direct connection to coal—such as having coal mines or having a recently retired or still operating coal-fired power plant. The analysis then identified 10 risk criteria, also referred to as vulnerability criteria, to assess counties’ dependence on the coal industry and the severity of the economic fallout from the decline of the industry. These risk criteria include such things as loss of mining jobs, decline in coal production, coal plant closures, and overall unemployment and poverty rates in the county above the national averages.

Let’s take a look at three Midwest states—Illinois, Michigan, and Minnesota—and what UCS and the UWUA found with respect to coal-dependent counties in each of them.

Illinois

Illinois has three of the 28 most at-risk coal counties in the US: Sangamon, Montgomery, and Saline counties. It is a coal-producing state, historically in the top five in the country for tons of coal mined per year. Fortunately, Illinois has the opportunity to enact state-based measures to help provide a just transition for its most coal-dependent counties right now.

Sangamon County, which includes the state capitol in Springfield, meets seven out of the 10 risk criteria. The county has one coal mine, Viper Mine, and its coal production declined by over 50 percent in 2020 and reduced its number of employees from 213 in 2019 to 167 last year (Source: S&P Global Market Intelligence). The City of Springfield’s City Water, Light, and Power (CWLP) retired two coal-fired units at the Dallman Power Station in late 2020. CWLP also plans to retire a third unit no later than September 2023.

Montgomery County and Saline County in Central and Southern Illinois both meet six risk criteria. Montgomery’s Deer Run Mine was idled between 2015 and 2019 and returned to only about half of 2014’s peak production in 2020. Montgomery is also home to the former Coffeen coal-fired power plant that retired in 2019. With respect to Saline County, its New Future and New Era Mines haven’t produced any coal since 2017 and 2016, respectively, and have shed almost all their employees. Another mine, Eagle River, sharply reduced its output and number of employees in 2020 compared to 2019. (Mining source: S&P Global Market Intelligence.)

Peoria County, meanwhile, meets five risk criteria centered around the E.D. Edwards coal plant, which retired one unit in 2016 and will close its remaining units by 2022. An additional eight Illinois counties meet four of the 10 vulnerability criteria, and all are in Southern Illinois (Gallatin, Jackson, Jasper, Macoupin, Perry, Randolph, White, and Williamson counties). Almost all of the Illinois counties mentioned here have unemployment and poverty rates above the national averages.

Key portions of the pending Clean Energy Jobs Act (CEJA) would assist impacted workers and communities. As my colleague Jessica Collingsworth recently wrote in a blog post, these provisions include a Displaced Energy Workers Bill of Rights to support fossil fuel power plant, coal mine, and nuclear plant workers who lose their jobs due to reduced operations or closures through advanced notice of closure, financial advice, continued health care and retirement packages, and full tuition scholarships at Illinois state and community colleges and trade programs.

Michigan

Unlike Illinois, Michigan has no coal mining, but its two major electric utilities—DTE Energy and Consumers Energy—are quickly transitioning away from their historic reliance on coal-fired power generation with significant portions of local tax base at stake. Many of the UWUA’s workers are located in Michigan, employed at seven different DTE and Consumers coal plants across the state—making the need to protect workers and address local tax revenue particularly acute.

The UCS/UWUA analysis found that two Michigan counties, Bay and Wayne, have five vulnerability criteria present and one county, St. Clair, has four. Bay and Wayne Counties both have unemployment and poverty rates above the national average, and St. Clair’s unemployment rate is higher than average.

In Bay County, near the thumb of Michigan, the J.C. Weadock coal plant was retired in 2016 and the final major structure demolished in 2020. The neighboring Dan E. Karn coal and gas units will begin retiring in the coming years, with the facility shut down entirely by 2031. The utility that owns these current and former plants, Consumers Energy, has said that it offers various options for employees to transition within the company depending on their preferences.

Wayne County is home to two DTE Energy coal plants: Trenton Channel and River Rouge. Trenton Channel, which has 115 employees, will soon be closed along with another plant, River Rouge. Up to a third of the City of River Rouge’s tax revenue comes from the plant, approximately $5 million and economic activity surrounding the plant. DTE has said that employees at River Rouge will be transferred and will not lose their jobs. The Wayne County Brownfield Redevelopment Authority received a $200,000 grant from the US Environmental Protection Agency in 2017 to assist with repurposing the River Rouge site. DTE may also provide a matching grant.

Finally, in St. Clair County, DTE also has plans to retire its coal plant in East China Township next year. DTE has said its goal is zero layoffs from the plant closure, managed through transfer opportunities to other plants in Monroe and Belle River or other parts of the company, as well as natural attrition through retirement. DTE is also building a new gas plant in East China, although that will have far fewer employees than the coal plant.

While Michigan’s electric utilities are helping manage their workforce transitions, the state’s coal-dependent counties have a critical need for a more intentional vision to support communities in adjusting to lost tax revenue and to repurpose former coal plant sites into economically diverse and beneficial uses. The UCS/UWUA report points to the need to invest not only in workers but also in communities to ensure they have a chance to recover from the decline of coal and diversify their economies. Proactive states can move to address it; for example, Illinois’ CEJA proposals described above would also make affected coal communities Clean Energy Empowerment Zones with tax base replacement, for up to five years, to cover lost tax revenues due to the closure of a fossil fuel power plant or coal mine—up to $100 million annually can be allocated to tax base replacement statewide.

Minnesota

As with Michigan, Minnesota does not produce coal but is in the process of phasing out coal-fired power plants in the state. The state is fortunate, however, to have significantly fewer coal-dependent counties than Illinois and Michigan.

Still, the UCS/UWUA analysis found that Itasca County in more rural Northern Minnesota has three vulnerability criteria present. Itasca hosts the Clay Boswell coal-fired power plant, and the county’s unemployment rate is above the national average. Neighboring Saint Louis County also meets three criteria and has experienced coal unit retirements and fuel switching; it also has unemployment and poverty rates above the national average.

As the UCS/UWUA report notes, “[t]he closure of coal plants, particularly the larger power plants located in more rural areas, result in a significant portion of job losses and lost tax revenue that supports county services.” The Minnesota-based Center for Energy and Environment (CEE) points out that the Clay Boswell plant employs approximately 170 workers—10% of whom reside in the city of Cohasset (population 2,700) and 90% within Itasca County—and that property taxes from Clay Boswell make up almost 70% of Cohasset’s annual city tax base. CEE emphasizes that, “[i]n today’s economy, power plant jobs are uniquely high in quality” and that “[t]here are no clear options to replace power plant jobs with positions that are similar in terms of pay, benefits, stability, and location.”

To help address the situation, the Minnesota legislature is currently considering an omnibus energy bill that includes creation of an Energy Transition Office within the Minnesota Department of Employment and Economic Development. The office would work with communities and workers impacted by a recent or upcoming power plant retirement and support a newly created Energy Transition Advisory Committee tasked with developing a statewide energy transition plan. If enacted, these measures would be steps in the right direction. We must also urge Minnesota Power, the utility that operates the Clay Boswell plant, to provide for a fair and equitable transition that prioritizes communities and the workforce in its integrated resource plan pending before the Minnesota Public Utilities Commission.

Creating a fair transition for Midwest coal communities

The UCS/UWUA report is a call to action for thoughtful and intentional planning and comprehensive support for coal-dependent workers and communities across the nation. It finds that policies to support coal workers in the energy transition are not only possible, but they are also affordable. Here in the Midwest, states like Illinois, Michigan, and Minnesota are experiencing the effects of coal’s transition and can demonstrate the intentional vision that is needed for a fair, just, and equitable shift to a low-carbon economy.

UCS has previously analyzed the diverse range of impacts that communities face when power plants close in our 2018 report, Soot to Solar. And the Midwestern Governors Association is currently leading an initiative to bring together knowledge, ideas, and lessons from throughout the region to help prepare Midwestern communities for power plant closures. These efforts illustrate the importance of passing strong state policies to support a fair transition for coal communities.

Coal workers and communities helped power our states, cities, and homes for decades. As the UCS/UWUA report urges, let’s join together and make sure we have comprehensive solutions to support dislocated workers, invest in community infrastructure, and empower local leaders to diversify their economies

Flickr/Don Barrett

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