The Shaky Economics of Gas-fired Power Generation

The report finds that gas-fired power plants in MISO and SPP frequently operate at a loss, costing ratepayers an estimated $117 million in 2019. This uneconomic generation is most prevalent in steam turbines and gas turbines, often driven by practices like self-scheduling and self-commitment. The authors argue that these inefficiencies, combined with rising fuel costs and the growth of renewables, make gas-fired power an increasingly risky and expensive investment compared to clean energy portfolios.

• In 2019, utilities in the Midcontinent Independent System Operator (MISO) and the Southwest Power Pool (SPP) incurred an estimated $117 million in operating losses from running gas plants when operating expenses exceeded market revenues.
• The average gas-fired power plant in MISO and SPP operated without recovering its weekly operating costs for 11.3 and 12.6 weeks of 2019, respectively.
• Uneconomic operation is strongly correlated with plant type; steam turbines and gas turbines are the most frequent loss-makers, while combined-cycle plants are the most economic.
• The highest financial losses from uneconomic gas operations in 2019 occurred in Louisiana, non-ERCOT regions of Texas, Nebraska, Oklahoma, Indiana, and northern Midwest states including Minnesota, Wisconsin, and Michigan.
• Entergy Corporation incurred the highest total weekly operating losses among the analyzed owners, totaling $24.6 million in 2019.
• Certain operational practices, such as 'self-scheduling' and 'self-committing', allow power providers to operate plants regardless of whether they recover costs, which can displace cheaper, cleaner energy resources.
• The Gerald Andrus Power Plant in Mississippi operated uneconomically during 22 of the 23 weeks it ran in 2019, resulting in $3.3 million in unrecovered costs passed to ratepayers.
• Analysis of the Nichols Generating Station in Texas suggests the use of self-commitment to keep units online at minimum operating levels even when fuel and maintenance costs exceed market prices.
• Basin Electric Power Cooperative's Lonesome Creek and Pioneer Generation Stations in North Dakota both operated at a loss for almost all weeks of 2019, incurring $3.2 million and $2.9 million in losses respectively.

APA

Massie, A., & Daniel, J. (2022). The Shaky Economics of Gas-fired Power Generation. Union of Concerned Scientists. https://www.ucs.org/sites/default/files/2022-06/Economics-gas-fired-power.pdf

Chicago

Massie, Ashtin, and Joe Daniel. The Shaky Economics of Gas-fired Power Generation. Union of Concerned Scientists, 2022. https://www.ucs.org/sites/default/files/2022-06/Economics-gas-fired-power.pdf.

Wikipedia

{{cite report |last1=Massie |first1=Ashtin |last2=Daniel |first2=Joe |title=The Shaky Economics of Gas-fired Power Generation |publisher=Union of Concerned Scientists |date=June 2022 |url=https://www.ucs.org/sites/default/files/2022-06/Economics-gas-fired-power.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{massie2022shaky, author = {Massie, Ashtin and Daniel, Joe}, title = {{The Shaky Economics of Gas-fired Power Generation}}, institution = {Union of Concerned Scientists}, year = {2022}, month = jun, url = {https://www.ucs.org/sites/default/files/2022-06/Economics-gas-fired-power.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }