By Taylor Kuykendall

Peabody Energy Corporation submitted a petition to intervene with Minnesota Public Utilities Com in the matter of the Investigation into Environmental and Socioeconomic Costs.

Peabody Energy Corp., the world's largest private-sector coal company, is seeking a voice in a debate over how Minnesota officials determine the "social cost of carbon," a pricing factor that could push utilities away from coal and influence other states to do the same.

In a petition to intervene in a docket filed with the Minnesota Public Utilities Commission, Peabody says it wants to participate in a work group formed to determine how Minnesota prices carbon and preserve its ability to participate in the proceeding "substantively" in the future. Peabody says it has a large stake in the matter and that its interests and expertise are not well-represented.

In 2013, Peabody subsidiary COALSALES LLC sold approximately 1.5 million tons of its coal from the Powder River Basin to producers at five different Minnesota power plants, according to the filing. The company sells metallurgical and thermal coal to customers in 30 countries on six continents.

"It is past time for the United States to join leading nations such as Japan and Australia in recognizing the importance of low-cost electricity and the punishing effects of flawed carbon targets on families, businesses and the economy," said Vic Svec, Peabody senior vice president of global investor relations and corporate relations.

In a statement to SNL Energy, Svec cited a recent study on the social cost of carbon that concludes that the benefits of fossil fuel energy outweigh the cost of carbon by a magnitude of 50 to 500 times. A study touting the same figures was released Jan. 22 by the American Coalition for Clean Coal Electricity and cited increased global energy availability as a driving factor behind increased life expectancies and other positive social factors.

Mary Anne Hitt, director of the Sierra Club's Beyond Coal campaign, was critical of the report and said it inappropriately conflated the benefits of electricity with the idea that coal must be the source of that electricity. Hitt told SNL Energy on Feb. 19 that Minnesota's pollution cost values have not been updated in nearly 20 years and fail to reflect current science on the effects of pollution on public health.

"Fossil fuel power pollution costs Minnesotans $2.1 billion annually in health and environmental impacts; 94% of this impact is from coal pollution," Hitt said, citing a report from University of Minnesota professors. "Updating these cost values will force utilities to evaluate the true costs of burning dirty, outdated coal and would demonstrate how clean, renewable energy protects Minnesotans' health, unlike fossil fuels."

The Peabody filing focuses on the economic advantages of using coal and explains the "Peabody Plan." The initiative seeks to: accomplish energy access for everyone by 2050; replace 1,000 GW of traditional coal plants with supercritical and ultracritical plants; develop 100 major carbon capture, storage or use projects within 20 years; deploy coal-to-gas, coal-to-liquids and coal-to-chemicals projects in the next 10 years; and commercialize new coal technologies with the ultimate goal of near-zero emissions.

"The U.S. carbon-based economy benefits dramatically from coal, our nation's lowest cost and most abundant energy resource," Svec said. "Coal fuels both the essentials and conveniences of modern society, improving health, longevity and quality of life. … Affordable energy access is especially important at a time when a record 115 million Americans qualify for energy assistance, 48 million Americans suffer in poverty and more than half of Americans have said a $20 increase in their utility bills would create hardship."

A coalition of groups including the Sierra Club and the Minnesota Center for Environmental Advocacy, or MCEA, petitioned Minnesota to reopen a case to update how the commission calculates the public health impact of electricity generation. According to the MCEA, the commission's value for carbon dioxide ranges from 42 cents per ton to $4.37 per ton, while the federal government places a value of $12 to $117 per ton on carbon dioxide emissions.

The commission was first charged with establishing environmental costs by the legislature in 1993. After a December 2000 investigation, the commission began updating the costs to adjust for inflation and updated annually thereafter, except for 2006. Environmental groups say now the commission needs updates beyond inflation adjustments.

"According to the [Minnesota Department of Commerce], updated values would reduce the possibility for harm from faulty resource planning decisions based on outdated information," the commission wrote in an order reopening the case issued Feb. 10.

Utilities in Minnesota have made numerous filings with the commission questioning the validity of the University of Minnesota report and questioning the need for changes to state regulations, particularly for carbon dioxide due to federal regulations that seek to address the same issue.

The group of stakeholders was tasked with providing recommendations to the commission within four months of the order issued Feb. 10.