BOSTON - Private equity firms are proving there’s still plenty of profit in the U.S. coal industry despite a decade of falling demand for the fossil fuel. They are spending billions of dollars buying coal-fired plants on the cheap - and getting paid even when they are not providing power.
The lucrative investments illustrate how fossil fuels will remain an important part of the energy mix - and continue spinning off cash for investors - even years after demand for them peaks as the world transitions toward cleaner energy sources. “The capacity power market is a certain source of revenue for coal plants that might otherwise be uneconomical,” said Sylvia Bialek, an economist at New York University’s Institute for Policy Integrity.
The private equity owners of Ohio’s Gavin Power Plant in the PJM grid, for example, have squeezed hundreds of millions of dollars out of the facility since buying it four years ago, even though it only runs about 60% of the time. Meanwhile, mutual funds that invested in Lightstone’s debt are receiving payments pegged to a floating interest rate that has ranged from 4% to 6% - far higher than about 1.4% on the U.S. benchmark 10-year yield.Other private equity firms have also been betting on coal power capacity payments.
The reserve coal plants create good jobs. Private-equity owned coal plants can pay their staff about $100,000 a year for keeping the facilities on standby and firing them up when needed, according to Shawn Steffee, business agent for the Boilermakers Local 154 union in Pennsylvania. He said coal plants in the state “ran like a freight train” during the recent cold snap.
It time Coal companys are closed period.
Venha servir a Jesus, está c fome dê comida c sede dê água c frio dê roupas Jesus está em nós irmãos da Igreja e esta é a única forma da Bíblia de servir a Jesus Ou apartem-se de mim para o fogo eterno porque tive fome sede frio doente e não me serviram Mateus 25:41,42,43 amém!
hungryghosts
Diamonds in the ruff