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Dirty Coal Plants Lose Another Source of Funding

Putting the Brakes on Funding for Rural Coal-fired Power Plants

The federal government, through the Rural Utility Service (RUS) of the Department of Agriculture, has long subsidized power projects in rural areas by making and guaranteeing large loans to electric utilities. The proposed coal-fired Highwood power plant, near Great Falls, Montana, was to have 85 percent of its funding guaranteed by the federal government.

$600 Million Smokestacks

In May 2007 RUS announced that it was preparing to fund the Highwood plant at an estimated cost of $600 million even though it had never considered the plant's true costs and compared the true costs of more environmentally-friendly power sources, such as wind power. Beyond the economics, RUS had also neglected to consider the global warming impacts of financing the Highwood Plant along with several other new plants that would collectively release millions of tons of greenhouse gases every year for many decades into the future.

Global Warming on the Taxpayer Dime? Not So Fast

In July 2007, Earthjustice filed suit challenging RUS financing of the Highwood power plant with an expectation that a win would affect RUS plans to finance seven other proposed conventional coal power plants. In March 2008, the RUS reversed itself and announced that it would not fund new dirty coal plants in 2008 and 2009. With Wall Street downgrading coal stocks, investments in this old technology are drying up.