Coal isn't always the cheapest alternative for power generation, a small Alaska nonprofit says in a new study.

Ground Truth Trekking, a group that promotes "responsible and sustainable" choices about natural resource issues, said it found no clear correlation between coal use by states and power prices.

"It really was an assumption on my part that the oft-quoted relationship between coal and electricity prices was pretty solid," geologist Bretwood Higman, one of the study's authors, said in an interview. "Then it turns out there is no relationship between the amount of coal burning a state does and the price of electricity."

The researchers say they crunched 20 years of power generation and price data and information from the Department of Energy and its Energy Information Administration.

In the 48 coal-burning states, they found 13 cases where coal usage had a correlation with energy prices -- but not always in the same direction. Although in South Carolina and Wisconsin higher coal use was associated with cheaper power, the pattern was reversed in Arizona, the report says.

"The lack of a clear correlation means that there are other factors driving consumer electricity prices, and variations appear to be largely regional," the report says.

"If past trends continue to apply," it says, "states experiencing high energy prices will not solve the problem by burning more coal, and states seeking to move away from coal as a fuel for environmental reasons will not see prices rise."

The report comes amid companies' efforts to mine more of Alaska's vast coal resources. They want to feed the growing Asian hunger for the resource.

The authors also said the cost of building and operating a new coal plant is comparable to or more expensive than other energy sources. Plus, they said, coal's cost increases when counting its externalities, including health problems.

In a study released last year, Harvard Medical School researchers put the annual "hidden costs" of extracting, transporting, processing and burning coal at at least $345 billion and maybe as much as $523 billion a year (Greenwire, Feb. 16, 2011).

"There are ways that states can reduce their coal consumption without seeing an increase in prices," Higman said. "Knowing that opens up that option."

Coal industry leaders say such studies do not give enough credit to their efforts to make the resource cleaner and coal's track record of providing cheap power.

Last month the American Coalition for Clean Coal Electricity (ACCCE) touted its own report authored by environmental attorney Eugene Trisko showing that coal will remain the cheapest electricity fuel for years to come (E&ENews PM, Feb. 7).

"Because coal has provided about half of America's electricity over the past decade, electricity prices have actually declined when adjusted for inflation," ACCCE CEO Steve Miller said in a statement.

Higman and his co-authors say they welcome scrutiny of their review and hope it helps inform the policy debate.

"It's information that is directly relevant to policymakers," Higman said. "I was very surprised [with the results]. That's exactly the fun behind digging into the data."

Click here to read the findings.