New Power Plant Data Show Another Year of Racial and Economic Inequities

Peaker power plants, which produce some of the most polluting and expensive electricity on the power grid, disproportionately impact neighborhoods inhabited by low-income people and people of color. These findings are based on 2022 demographic and emissions data recently released by the Environmental Protection Agency (EPA). Clean Energy Group (CEG) tracks and analyzes this data in our Peaker Power Plant Mapping Tool to shine a spotlight on the disproportionate burden that fossil peaker plants place on environmental justice communities, and to highlight the need to replace peakers with cost-effective, reliable, emissions-free, and readily available alternatives such as solar combined with battery storage. EPA’s 2022 data show no significant change from previous years, pointing to a need for a stronger push to retire these plants and protect surrounding communities. 

EPA’s data include operational and emissions data from all 3,387 US power plants running in 2022, as well as demographic data from neighborhoods within a 3-mile radius of these power plants. Using the definition of combustion-based power plants that have a name-plate capacity of over 10 megawatts and that operate less than 20% of the year, CEG identified 1,087 peaker power plants operating in 2022.  

Overall Trends: Low Capacity, High Costs  

The number of peaker power plants decreased by 112 between 2021 and 2022, however this doesn’t represent a retirement of 112 peaker power within that year. 69 peaker plants increased their run-time above 20% and therefore were not classified as peakers, while 55 plants decreased their capacity factor to under 20% and were included in our analysis. 35 peaker power plants showed up in the 2022 data that were not included in any power plant data in 2021, indicating newly built plants or plants that were recommissioned.  

By definition, peaker power plants have a low capacity factor, which is the percentage of time during the year that they are operational. In 2022, the 1,087 US peaker power plants ran an average of 5.3% of the time for a total of 464 hours, a slight increase from 4% in 2021.  This low capacity factor does not mean low electricity prices – ratepayers are charged exorbitantly high “capacity payments” to have these peaker plants on standby. These capacity payments can reach billions of dollars in just one city and result in energy prices up to 1300 percent higher than average electricity costs. Low-income families of color spend a disproportionately high percentage of their household income on energy bills, and capacity payments for peaker power plants contribute to this trend.  

Demographic Trends: Peakers Disproportionately Impact Low Income People and People of Color    

Fossil fuels disproportionately affect people of color and low-income neighborhoods across the supply chain from extraction to combustion, and peaker plants are no exception.  

Almost two thirds of peaker power plants are sited in communities with a higher than average percentage of low-income residents, showing that these highly emitting plants are more likely to be located in or near low-income communities. A total of 692 peakers are located in or near communities where over 27% of the households are classified as low income, and 195 are sited in neighborhoods where 44% of households are considered low-income.  

Of the 56 million people who are living within three miles of a peaker plant, 47.3 million, or 83%, live in areas where the percentage of people of color is higher than the average neighborhood in America. While harms from peaker plants expand past the three-mile radius reflected in this analysis, these communities are bearing the brunt of the slew of pollution emitted from peakers.  

Emissions Trends: NOx Emissions are Up, and Newly Available PM2.5 Data    

In CEG’s previous map update using data from 2021, two trends were identified: a decrease in total capacity of the peaker fleet and an increase in nitrogen oxide (NOx) emissions rates. These data from 2022 followed both trends, albeit less drastically. While a comparison of 2019 and 2021 data saw total capacity drop 25 percent from 364 gigawatts (GW) to 272 GW, 2022 capacity only decreased to 261 GW, a four percent drop.  

Compared to 2021, NOx emissions rates increased 35% in 2022, reaching an average of 32.3 lb/MWh. Peaker plants emit high levels of NOx due to inconsistent run times, aging infrastructure, and inadequate emissions control technologies, and in addition to contributing to smog and ground-level ozone, these emissions cause myriad respiratory and cardiac health issues. Advocacy and research around the harms of NOx emissions has led to attempts to increase regulation around this air pollutant, such as the “peaker rule” adopted in New York in 2019. Due to more stringent emissions limits established by the rule, peaker plants in New York City were set to retire to comply with the new regulations before NYISO, the operator of New York’s power system, ordered these plants to delay retirement for up to four years to bridge projected reliability deficits. This delay highlights the need to proactively replace peaker plants with clean and reliable alternatives that are readily available to avoid reliability gaps that could delay fossil retirement and add years of harmful pollutant emissions.  

Newly available data in the EPA’s power plant mapping tool include annual emissions and emissions rates for PM2.5, an extremely small air pollutant linked to poor respiratory and cardiac health, cancer, and premature death even due to short exposure times. In 2024, the EPA strengthened air quality standards for PM2.5 revising the acceptable annual average concentration to 9.0 micrograms per cubic meter of air, while the World Health Organization went even further, setting their standard at 5.0 micrograms per cubic meter. In comparison, the average emission rate per MWh of electricity generated for peaker plants analyzed by CEG was 1.4 lbs, the equivalent of 635,030,000 micrograms. Exposure to PM2.5, frequently identified as the most harmful air pollutant, disproportionately affects low-income communities and people of color in the US, exemplifying the need for discrepancies in peaker plant siting to be scrutinized and highly emitting plants to be replaced with clean and reliable solutions.  

Looking Ahead: Peaker Alternatives, Rising Demand, and Potential Deregulation  

Cities and states across the country are pursuing alternatives to peaker power plants. This past fall, the PEAK Coalition published a report outlining the role demand management can play reducing reliance on peaker plants in New York City. Demand management refers to strategies used to reduce electricity consumption during peak hours. It is just one of the proven ways that power authorities, governments, and utilities can reduce the use of fossil fuel peaker plants and the disproportionate burden they place on low-income communities and people of color. Battery energy storage systems and virtual power plants are similarly being discussed and implemented across the country to bridge capacity gap during peak hours.  

However, with predicted electricity demand on the rise, more retirement-age peaker power plants may be pushed to remain online and, in some regions, new gas plants may be proposed. 

The Trump administration’s promises to boost oil and gas production represent a huge hurdle in the coming years for retiring fossil fuel powered electricity generation. The potential for deregulation of this catastrophic industry and federal cuts to climate-related spending loom large, making it even more crucial that states stick to their energy goals and commit to retiring peaker plants in the coming years. With proven clean energy technology and clear health and cost improvements, there’s no excuse to continue running these expensive and devastatingly harmful plants.