Aside from the environmental and health consequences of coal, some noteworthy developments have occurred in the last few weeks that make coal an even bigger loser than we have previously considered. Dynegy, a Houston, TX-based energy company having the infamous distinction as the “King of Coal," has since 2006, been planning the construction of seven new coal-fired energy plants—more new coal plant construction plans than any other company in the United States. Several setbacks to the 2006 plans followed, most notably a 2008 agreement with New York Attorney General Andrew Cuomo whereby Dynegy would be required to report to the U.S. Securities and Exchange Commission the "material financial risks faced by coal-fired power plants associated with global warming."

Dynegy announced early this week that it was calling off its 2006 plans to build another of the original seven planned new coal-fired plants. This announcement came in addition to the January 2009 announcement that five new plants that were planned had been scrapped. Kudos to the Sierra Club for organizing the largest environmental grassroots campaign in the organization’s history in order to fight the new developments. The reasoning from Dynegy regarding the dissolution of development plans was clear: coal is a dirty, expensive business that isn’t a money-making proposition. This is clear for Kansas’s Sunflower Energy, even.

Last week, a petition was filed by Earthjustice on behalf of the Sierra Club against the Rural Utility Service (RUS) of the United States Department of Agriculture asking the DC federal district court to enforce the environmental review provisions of the National Environmental Policy Act (NEPA). The petition revealed Sunflower’s precarious financial situation, and, more importantly, the amount that U.S. taxpayers are on the hook for Sunflower’s first failed coal development in the 1980s.

"In the early 1980s, RUS committed $543 million in loans and guarantees so Sunflower could build its existing 360-MW coal-fired power plant, Holcomb 1. Soon after the construction of Holcomb 1, Sunflower experienced financial difficulties and defaulted on its debt service payments. Sunflower’s financial difficulties have been attributed to its construction of excess capacity.

"As a result, RUS and Sunflower in 1987 entered into an agreement to restructure Sunflower’s debts. Under the Debt Restructuring Agreement (“DRA”), Sunflower was indebted to RUS via three notes with different terms: the ‘A Note’ ($383 million) payments were fixed and serviced from current cash flow, the ‘B Note’ ($173 million) was paid from incremental increase in Sunflower’s available cash flow, and the ‘C Note’ ($106 million) was to be paid after the B Note was fully repaid.

"Even after the restructuring, Sunflower was unable to generate sufficient cash flow to satisfy its obligations to RUS on these notes. Unpaid interest on the B Note was capitalized and, by 2002, the B Note debt had ballooned from $173 million to $518 million (total Sunflower debt in 2002 was over $914 million). [Citations omitted.]

More ominous for Sunflower and Sunflower’s ratepayers, the petition alleges that RUS has concluded the B Note payments are unlikely to make any appreciable returns and, if left without an additional restructuring, will further balloon to $2.7 billion in 2021. Of course, the petition has been redacted due to an order by the DC district court, so the full details of the amounts fully written-off and absorbed by RUS—a taxpayer-funded loan agency—remains unknown.

That’s right, Kansans! You’ve paid thrice for the failed corporate planning of Sunflower Energy—once with your pocketbook, once with your environment and once with your health. And, here we go again. I’m afraid the “If at first you don’t succeed…” axiom is inappropriate in the context of taxpayer-funded failures, especially where the health and environment of taxpayers is substantially eroded. While the air may not be clear if Sunflower ultimately gets it way, it is clear Sunflower intends on burning more than just coal -- it plans on burning another hole in the pocket of U.S. taxpayers.