against the heat input (i.e., fuel use) at each facility. A higher heat rate means that more coal is
used. As one might expect, the plants with the highest capacity factors are among the most efficient,
with heat rates less than 10,000 Btu per kWh of electricity generation. However, the figure
has a substantial right-hand tail, with many facilities that appear to be efficiency outliers, suggesting
that there are a number of plants for which substantial energy efficiency gains are available.
The impacts of measures to reduce GHG emissions by promoting fuel economy will depend
on the source of the variation in heat rates. As shown in Figure 3, heat rates (i.e., operating
efficiency of existing coal-fired units) are not distributed evenly across the country.
The darker-shaded states have higher average heat rates—and thus more CO2 emissions—per
unit of electricity generated, indicating lower efficiency. Note that regions of the country often
associated with heavy coal use—the Midwest, the Southeast, and Appalachia—have relatively
more efficient coal-fired electricity production. Qualitative and preliminary statistical analysis
described in Richardson et al. (2011) indicates that technology, vintage, or coal type does not
strongly predict the distribution in heat rates across plants.
Further preliminary statistical analysis on the distribution of heat rates that was conducted for
this ‘‘Policy Monitor’’ suggests that, among other factors, the delivered cost of coal is potentially
important. The regions of the country with less efficient facilities appear to be the regions with
relatively lower coal cost. If this is a robust result, it indicates that a cap-and-trade program that