Coal Power Costs Soar 28% Since 2021, Rising Faster Than Inflation

Forbes

5 hours ago

Portrait of a mid adult man in his 30s checking his energy bills at home. He has a worried ... More expression and touches his face with his hand while looking at the bills. He is surrounded by documents, his laptop and a calculator.
America's power bills are soaring. Coal-fired electricity keeps making it worse.
Between 2021 and 2024 the cost to generate coal-fired electricity across the United States has skyrocketed 28%, according to new Energy Innovation analysis – nearly twice the rate of inflation over that same time, with the highest price spikes in states east of the Mississippi.
Existing coal-fired power plants are also running far less than in the past because coal is more expensive than clean energy, which drives up the cost of every megawatt-hour of energy they generate, and forced consumers to pay $6.2 billion more for the same amount of power in 2024 than they would have in 2021.
It's another hit to America's bottom line as fossil fuels force families to make hard financial choices – 34% of households had to cut back or skip necessary expenses in the past 12 months to pay energy bills, while 23% were unable to pay part or all of their energy bill.
But coal's rising costs could crunch consumer budgets even further. Executive orders issued by the Trump administration would force utilities to keep expensive coal-fired power plants online even if they increase consumer costs or were scheduled to close. This has already forced a Michigan coal-fired power plant to remain online even though the utility that operates it said closing the plant would save its customers more than $600 million.
The Trump administration promised to cut energy bills in half by the middle of 2026 but coal's soaring costs threaten American consumers with the exact opposite.
Coal-fired power plants have only gotten more expensive since Energy Innovation's 2023 Coal Cost Crossover report, which found 99% of America's existing coal fleet cost more to simply keep running than replacing them all with new local solar, wind, and energy storage.
This new analysis shows 95% of the 162 U.S. coal-fired power plants that were still operating at the beginning of 2025 were more expensive than in 2021, and costs increased at twice the rate of inflation for half of these plants.
2024 Weighted Average Cost of Coal Power By State
In 2021, the weighted average cost of a MWh of power generated by coal-fired power plants was $36/MWh, and in 2024 the average cost was $46/MWh, or 28% higher in just three years. The Consumer Price Index, a proxy for inflation, grew 16% over the same time.
Coal prices have been highest in Appalachian coal mines, but digging rocks out of the ground to crush and burn simply costs more across the country than other forms of energy.
Average coal commodity spot prices compared to average coal price for electricity generation
Coal plants also cost more to run because they're getting geriatric (the average U.S. coal plant age was around 44 years in 2024), which increases operations and maintenance costs – things tend to break as they get older. The average coal plant capacity factor, or the amount of time they are generating power, dropped from 46% in 2021 to 38% in 2024, which increases their overall cost to run.
Consumers are already paying the toll for these expensive power plants.
In Georgia, Plant Bowen was originally scheduled to retire in 2028, but Georgia Power recently extended its life to 2035 despite costs increasing from $46/MWh in 2021 to $72/MWh in 2025. That decision came on the heels of Georgia Power forcing consumers to endure six electricity bill rate increases between 2023-2025 while the utility's profits soared 10% over the same time.
In South Carolina, the Williams Station coal-fired power plant had its retirement pushed back from 2028 to at least 2031, even though its costs have spiked by $27/MWh, or more than 50%, while South Carolina energy costs are forecast to rise 6.3% this summer.
In Ohio, consumers have been forced to pay $679 million over the past decade via fees on their power bills to subsidize two money-losing coal-fired power plants owned by the Ohio Valley Electric Corporation – including a whopping $172 million in 2024 alone. Statewide, electricity rates just jumped anywhere from 10%-36% across Ohio's six major utilities.
The list goes on and on.
Michigan is the newest front in this war on affordability. Following the Trump administration's April executive orders to prop up coal, the U.S. Department of Energy declared an 'energy emergency' and ordered the 63-year old J.H. Campbell coal-fired power plant to stay open at least through this summer to avoid a 'risk of blackouts.'
But the truth is that no energy emergency exists in Michigan. Consumers Energy decided to close Campbell in 2022 after determining the regional MISO grid had enough extra capacity for it to be shut down, and estimated closing the plant would save its customers $600 million. 'We currently produce more energy in Michigan than needed,' said Dan Scripps, Chair of Michigan's Public Service Commission. 'As a result, there is no existing energy emergency in either Michigan or MISO.'
Pro-coal federal officials say keeping expensive coal-fired power plants online to meet America's surging electricity demand is a good idea, but relying on these aging plants will hit consumers harder and harder every year.
These impacts aren't theoretical; families and businesses are already paying the toll. Across the country, electricity prices have risen nearly 20% since 2021, and consumer electricity rates have risen fastest in states that rely heavily upon coal like Kentucky and West Virginia, where electricity rates rose 24% between 2021 and 2024.
Compare that to states with the highest levels of wind and solar generation like Colorado, Iowa, Oklahoma, or New Mexico where consumers have experienced the lowest rate increases and it's clear power price spikes are driven by fossil fuel price volatility and the climate change impacts they cause.
The good news is state officials and utility regulators have the power to protect Americans from rising coal costs while ensuring the grid can meet rising electricity demand.
Solar, wind, and energy storage composed 93% of new resources added to the grid in 2024, and moving those proposed resources through the interconnection queue is the fastest way to get new generation online. Utilities and their regulators can also get more out of the grid by reconductoring existing transmission lines with advanced conductors, or deploying demand response and energy efficiency.
Regulators can also prevent hidden costs of coal-fired power with common-sense policy. For instance, many states permit coal-fired power to run even when they're not the cheapest available generation – this 'uneconomic dispatch' costs consumers more than $2 billion annually and is most prevalent in the Southeast and Western U.S.
Utilities and grid operators have plenty of options to keep the lights on, but consumers often have very few options on the price they pay for electricity. Inflation and fossil fuel prices keep rising – doubling down on coal will only harm consumers.