‘WAR ON COAL’ COMMENTS RESURFACE AFTER GA. POWER ANNOUNCES RETIREMENTS

Tamar Hallerman
GHG Monitor
1/11/13

Those hoping the results of November’s elections would silence the frequently-used “war on coal” mantra were proven wrong this week after a new round of coal retirements induced the familiar rallying cry from House Republicans. Southern Company subsidiary Georgia Power announced Jan. 7 that it is seeking approval from state regulators to retire 15 coal- and oil-fired units—totaling 2,061 MW of capacity—from its fleet due to upcoming federal regulations, the low price of natural gas and projected electricity demand. Republicans on the House Energy and Commerce Committee were quick to pounce on the news, sending out a media release listing the proposed retirements as the latest casualties to what they say is the Obama Administration’s “war on coal.” “This retirement announcement by Georgia Power is disappointing yet unsurprising,” Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) said in a Jan. 8 statement. “Already, we have seen a number of coal plants fall victim to the Obama administration’s assault on coal and I would not be surprised if there are even more closures in the months ahead.”

Whitfield’s comments indicate that House Republicans are likely to continue their heavy criticism of the Obama Administration’s environmental regulations into the new Congress. During the last session of Congress, the House Energy and Commerce Committee held a string of hearings focused on the Environmental Protection Agency and its regulatory agenda. Republicans on the committee frequently contended that the Administration is singling out coal and that regulations limiting the emissions of mercury, air toxics and greenhouse gas emissions from fossil plants would increase electricity bills, shed jobs and wound fragile economic recovery in coal-reliant states like Ohio and Kentucky. In an effort to bring coal’s future to the forefront of national debate ahead of the election, the House passed a package of bills aimed at stymieing EPA’s ability to regulate the industry. That measure was never taken up by the Democrat-controlled Senate and Obama ended up sweeping all of the major coal battleground states in November. Environmental groups rejoiced, expressing hope that coal’s supporters would cooperate with the Administration in the new Congress.

But in his release this week, Whitfield vowed to take action in the 113th Congress to defend the coal industry. “We are blessed with an abundance of coal which is the source of affordable energy for millions of American families and countless businesses. We will not stand idly by as the EPA seeks to regulate coal into oblivion,” Whitfield said. “House Republicans will continue pursuing sensible policies that ensure coal remains a prominent fixture in our ‘all-of-the-above’ pursuit of North American energy independence.” His colleague Phil Gingrey (R-Ga.) said Republicans on the House Energy and Commerce Committee would move forward on finding a “balanced approach” that would help the country achieve energy independence.

Utility is Heavily Coal Dependent

Whitfield and Gingrey were reacting to Georgia Power’s announcement that it would soon ask the Georgia Public Service Commission for permission to decommission most or all of the generating capacity at four of its power plants. Two-thirds of those units are coal-fired. Georgia Power said it would look to mothball most of those units by April 2015, the compliance date for EPA’s Mercury and Air Toxic Standards (MATS). “We recognize the significant impact that these retirements will have on the local communities and we took that into account when making these decisions,” Georgia Power President and CEO Paul Bowers said in a Jan. 7 statement. “These decisions were made after extensive analysis and are necessary in order for us to maintain our commitment to provide the most reliable and affordable electricity to our customers.” The utility, which is Southern Company’s largest subsidiary with 2.4 million customers, said it would also switch two coal-fired units to gas, as well as install additional environmental controls on the rest of its coal fleet to comply with MATS.

Environmental groups cheered the news. The Sierra Club, whose Beyond Coal Campaign aims to end coal-fired electricity generation, called the announcement s a “victory for clean air and public health.” “Although Georgia Power has been slow to invest in clean energy generation to meet Georgia’s energy needs, today’s announcement demonstrates that coal-fired power plants are no longer able to provide competitively priced electricity in the Peach State,” the group said in a statement, recommending that the utility instead switch to renewables like wind and solar.

MATS Continues to Generate Retirements

MATS has quickly become one of EPA’s most controversial environmental regulations, requiring the operators of coal and oil-fired units nationwide to install pollution-control equipment such as scrubbers, baghouses, dry sorbent injection technology or electrostatic precipitators on all capacity within a three-year timeframe. When EPA finalized the rulemaking early last year, it said states could extend the compliance timeline for projects by one year on a case-by-case basis. The White House can also greenlight an extra fifth year to individual units if the local reliability of the power grid is threatened.

As a utility that relies heavily on coal, Georgia Power’s parent company Southern Company lobbied hard for EPA to extend the compliance timeline for MATS to six years. At a meeting of utility regulators last fall, a Southern official said that bringing the entirety of the utility’s coal fleet into compliance with MATS—which he said would cost the company $13 billion to $18 billion in retrofit costs—could lead to a 10 to 20 percent rate hike for its customers. Southern plans to install environmental controls on 13 GW of its coal capacity while shuttering up to 4 GW of capacity and switching another 3 to 4 GW to natural gas in order to comply with the rule.

Southern is hardly the only utility to announce widespread coal retirements in the last year due in part to the EPA rulemaking. American Electric Power said it would be shutting down about 12 percent of its coal fleet, while the Ohio-based FirstEnergy Corp. also said it would retire six older coal-fired power plants due to the MATS rule.