» EPA rules will cost jobs, raise prices News

» EPA rules will cost jobs, raise prices News

EPA rules will cost jobs, raise prices
By Dina Cappiello December 19, 2011 7:19 am
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WASHINGTON (AP) - More than 32 mostly coal-fired power plants in a dozen states will be forced to shut down and an additional 36 might have to close because of new federal air pollution regulations, according to an Associated Press survey.

Together, those plants — some of the oldest and dirtiest in the country — produce enough electricity for more than 22 million households, the AP survey found. But their demise probably won't cause homes to go dark.

The fallout will be most acute for the towns where power plant smokestacks long have cast a shadow. Tax revenues and jobs will be lost, and investments in new power plants and pollution controls probably will raise electric bills.

The survey, based on interviews with 55 power plant operators and on the Environmental Protection Agency's own prediction of power plant retirements, rebuts claims by critics of the regulations and some electric power producers.

They have predicted the EPA rules will kill coal as a power source and force blackouts, basing their argument on estimates from energy analysts, congressional offices, government regulators, unions and interest groups. Many of those studies inflate the number of plants retiring by counting those shutting down for reasons other than the two EPA rules.

The AP surveyed electricity-generating companies about what they plan to do and the effects on power supply and jobs. It was the first survey of its kind.

The estimate also was based in part on EPA computer models that predict which fossil-fuel generating units are likely to be retired early to comply with the rules, and which were likely to be retired anyway.

The agency has estimated that 14.7 gigawatts, enough power for more than 11 million households, will be retired from the power grid in the 2014-15 period when the two new rules take effect.

The first rule curbs air pollution in states downwind from dirty power plants. The second, expected to be announced Monday, would set the first standards for mercury and other toxic pollutants from power plant smokestacks.

Combined, the rules could do away with more than 8 percent of the coal-fired generation nationwide, the AP found. The average age of the plants that could be sacrificed is 51 years.

These plants have been allowed to run for decades without modern pollution controls because it was thought that they were on the verge of being shuttered by the utilities that own them. But that didn't happen.

Other rules in the works, dealing with cooling water intakes at power plants and coal ash disposal, could cause the retirement of additional generating plants. Those rules weren't included in the AP survey.

While the new rule heralds an incremental shift away from coal as a power source, it's unlikely to break coal's grip as the dominant domestic electricity source. Most of the lost power generation will be replaced, and the coal-fired plants that remain will have to be cleaner.

"In the industry we retire units. That is part of our business," said John Moura, manager of reliability assessment at the North American Electric Reliability Corp. NERC represents the nation's electrical grid operators, whose job is to weigh the effect a proposed retirement will have on reliability.

With so many retirements expected, that process could get rushed. "We are getting a little hammered here, because we see multiple requests," Moura said.

NERC, along with some power plant operators, is pressing the Obama administration to give companies more time to comply with the rules to avoid too many plants shutting down at once.

In addition to anticipated retirements, about 500 or more units will need to be idled temporarily in the next few years to install pollution controls. Some of those units are at critical junctions on the grid and are essential to restarting the electrical network in case of a blackout, or making sure voltage doesn't drain completely from electrical lines, like a hose that's lost its water pressure.

"We can't say there isn't going be an issue. We know there will be some challenges," Moura said. "But we don't think the lights are going to turn off because of this issue."

That hasn't stopped some critics from sounding alarms.

Rep. Darrell Issa, R-Calif., said in a letter to the White House this month that the EPA mercury rule could "unintentionally jeopardize the reliability of our electric grid." At a speech in New Hampshire in November, GOP presidential candidate and former Utah Gov. Jon Huntsman predicted summer blackouts. A recent U.S. Chamber of Commerce ad said a single EPA regulation "could threaten America's energy supply."

Particularly at the older, less efficient plants most at risk, coal already was at a disadvantage because of low natural gas prices, demand from China and elsewhere that was driving up coal's price, and weaker demand for electricity.

For many plant operators, the new regulations were the final blow. For others, the rules will speed retirements already planned to comply with state laws or to settle earlier enforcement cases with the EPA. In the AP's survey, not a single plant operator said the EPA rules were solely to blame for a closure, although some said it left them with no other choice.

"The EPA regulation became a game changer and a deal changer for some of these units," said Ryan Stensland, a spokesman for Alliant Energy, which has three units in Iowa and one in Minnesota that will be retired, and four in Iowa that are at risk of shutting down, depending on how the final rules look. "Absent the EPA regulations, I don't think we would be seeing the transition that we are seeing today. It became a situation where EPA broke the back of coal."

Some believe the change is long overdue. The two rules will cut toxic mercury emissions from power plants by 90 percent, smog-forming nitrogen oxide pollution by half, and soot-forming sulfur dioxide by more than 70 percent.

"Many of them are super old. They've either got to be brought up to code, fixed with the best available technology, or close them down," said Sen. Barbara Boxer, D-Calif., who heads the Senate Environment and Public Works Committee. "You can't keep on going."

The impact is greatest in the Midwest and in the coal belt — Kentucky, West Virginia and Virginia — where dozens of units probably will be retired.

Coal "is the fuel that is local to this area," said Leonard Hopkins, the fuel and compliance manager for the Southern Illinois Power Cooperative, which serves rural electric customers in 25 counties in the state. "We are scrambling to find ways to comply."

His options: switch to a lower sulfur coal, install additional pollution controls or retire the oldest boiler and buy cheaper power from elsewhere.

For many of the country's oldest coal-fired plants, retirement is the cheapest option.

"It is more expensive to retrofit these plants than retire them and build new generation," said Chris Whelan, spokeswoman for Kentucky Utilities, which announced in September that it was retiring three coal-fired power plants in the state. The plants, which came on line in 1947, 1962 and 1950, employ 204 people.

Whelan said the company is "going to do everything we can to reallocate the work" by shifting employees to a new gas-fired power plant.

In some places, a job at the power plant is the best thing going.

Thirty people work at the Central Electric Power Cooperative plant in Chamois, Mo., where EPA regulations have put the plant in danger of shutting down. Some employees are looking to see if there are other power plants where they could find work.

"We always knew there was a chance we could get shut down," said Robert Skaggs, who has worked at the 50-year-old power plant for 10 years and is also an alderman in the town of 400. "It's pretty obvious. Our plant is an old plant."

Chamois Mayor Jim Wright saw the sewing factory leave and doesn't understand why coal has to do the same.

"Coal's coal. If you are going to dig and ship it to China, you might as well burn it here," he said.

Electricity bills are also a concern.

Kentucky Utilities expects its customers to see as much as a 14 percent rate increase to make up for the $800 million it is spending to replace what will be retired, and the $1.1 billion it plans to spend on anti-pollution upgrades. Other power companies have applied to recoup the cost of retrofits or of building new gas-fired power plants. The EPA estimates that industry will spend $11 billion complying with the two rules by 2016.

For others, the biggest issue with plant retirements is the loss of property taxes. As plants wind down and close, their assessed value drops, reducing what they pay to local governments.

In Salem, Mass., Dominion plans to retire two units at the Salem Harbor Station later this year, a move that could halve the plant's workforce in a town famous for its 17th century witch trials and where the major business is tourism.

The loss of its 50-year-old power plant poses two dilemmas: how to replace its biggest taxpayer and what to do with the 60 acres of waterfront property when the plant is gone.

"It's not like losing a Dunkin' Donuts," said Mayor Kim Driscoll, noting that attractions such as Baltimore's Inner Harbor took decades to redevelop from abandoned industrial property.

For the next five years, Salem will make up for Dominion's dwindling $4.75 million tax bill with state money, but after that the future is unclear.

"It's a big chunk of change when you're looking at we still have the same number of kids in school, we still have the same number of calls for police and fire, we have the same number of parks and resources that need to be maintained and kept up," Driscoll said. "That's not to say there aren't folks locally that are happy with the fact that a coal-based plant won't be here forever. There are certainly folks here that see it as a way for Salem to flourish in other ways."

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4 Comments

Comment by hardheaded
December 19, 2011 @ 9:34 am
I don’t understand why these plants don’t just upgrade, replace the old with new.Creating new jobs to build and improve with new technology, better ways to use the same resources. Replace the old with new ones, you have all of the wires, towers and infrastructure there. There are better ways to use the existing coal, clean ways. Most of the people still need Power, that not going to go way. We need to put Americans back to work and this seem to be a good way to do it.

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Comment by jenersea
December 19, 2011 @ 10:05 am
The powers don’t want them to upgrade. They want to see this country totally fall apart by whatever means. Lay off more people, nothing to replace the existing power generating plants. The EPA needs to be reined in, the country is a whole lot cleaner than when I was a kid. Put scrubbers on the stacks of these power plants. You can’t build nuke plants, what are we to do, just wish the power we need into being? There is no leadership anymore in Washington from either party.

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Comment by makesense
December 19, 2011 @ 10:42 am
Obama has this undisclosed (secret) agenda for implementing his GREEN ENERGY plans for the USA that is based on their belief that Global Warming needs to be reversed. His plans are:

1. Close down coal generating plants and replace them with solar and wind power.

2. Not replace the lost coal power generating capacity to put pressure on people to build more solar and wind power plants regardless of its economic cost and reliability. If there is an imbalance of power supply to demand, force the people and industry to adjust by cutting down on their power consumption until the solar and wind energy industry catches up…. it will never do.

3. Not advancing the building of new nuclear plants which can replace the lost coal power generation capacity with clean energy. Drag the permitting process as long as possible (many years) to push/advance/justify his solar and wind power generation long term plans. Use the Fukushima disaster as the excuse for the extremely long delay.

4. Not approve new oil drilling permits in the continental US and Alaska. Delay the TX pipeline construction permit as long as possible then using environmental regulations, cancel it altogether.

Obama could not care less and/or do not understand that millions of jobs will be lost should we have a big power shortage – and the consequent quick rise of power costs which in turn further dampens economic activities and make the US more uncompetitive around the world. He is calculating that this power shortage will happen after he has been re-elected and there is nothing that the Republicans can do about it. He will have his Green Energy plan in full bloom and, in his mind, the country will be better for it.

Deep inside, Obama does not really care for job creation. The only reason he is pretending that he is concerned today for the high unemployment rate and is doing something to alleviate it is because he wants to be re-elected. If he is truly concerned for the low job status of people why did he not push for job creation as soon as he took over in Jan of 2009 instead of devoting all his energy into his Obamacare plan? He approved his cash for clunkers only because union jobs (his supporters) would be lost. When he took over, 700,000 jobs a month were being lost. He cannot claim he did not see it. He blamed Bush for the worsening economic activities so he did see it…. but chose to ignore it.

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Comment by JDZ
December 19, 2011 @ 11:56 am
The federal government under liberal politicians (especially Obama) has incrementally been taking control of our private energy domain through more and more regulations and oversight. Obama has made more strides in that direction then all of the Presidents combined with hundreds of new regulations under the EPA with the carbon emission standards just recently added to the EPA for regulation. Once the federal government has control of our energy industries, it is all over since energy is the heartbeat of the economy of the country. The government then can dictate policy and decide across the board who the “winners or losers” are in terms of government subsidies or policy. The Obama administratin knows this and is using the environmental excuses as their motive for “taking control” of oil, natural gas, coal, nuclear, etc. and pushing alternative fuels that will never be mainstream and “supplementary” at best. This will give them more political leverage over the country then any other area save for our healthcare which they now have control of as well. So, we are in deep do-do if Obama is re-elected next year as he and his minions are doing a great job of getting control of America and move us more and more toward their socialist model.

This country has 300 million people and the world at large has over 9 billion. We represent 3% of the world’s population and are the “cleanest” country environmentally of all modern industrialized countries. But, the extremist environmentalists in this country for some reason think that we can solve the world’s pollution problems on our own and have taken their obsession to extremes and have gone past the 80/20 point in their argument. One good blast from a major volcano in the world emits more carbon dioxide then we do in several years but that data falls on deaf ears if you are a zealot environmentalist who has lost all signs of practicality and who have put mother earth and red legged frogs and smelts higher on their priority list then human beings.

I am from West Virginia originally but live in California now (talk about two ends of the extremes) and in WV 92% of electricity is from coal fired power plants. The residents of WV, who are amongst the poorest in the country, are going to get sapped by huge increases in electricity when these coal fired plants are shutdown. So much for Obama caring about “people” and their needs.

We all know that solar and wind, particularly in a state like WV, will never replace fossil fuel powered electric power plants because the natural habitat in West Virginia is not good for solar or wind in the quantities required. At best, solar, wind, and thermal are going to only be “supplementary sources” for coal, natural gas, and nuclear for probably hundreds of years.

If the Obama administration really wanted to spend stimulus money to help the economy, what he should do is pour money into the repair and conversion of existing fossil fuel power plants and in the installation of more nuclear power plants to reinforce our ability to stay in front of our energy needs. This money would actually create good jobs and we would get something we need back from the expenditure in terms of cleaner energy and lower electricity rates. Oh, I forgot, his “greenie” financial investors would not make as much money if he did that. Sorry.

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