EPA Rules, Economy, Natural Gas Prices Prompt Georgia Power to Retire 2 GW of Coal, Oil Power

Georgia Power on Monday said it was seeking state regulatory permission to decertify and retire 15 coal- and oil-fired generating units—a total capacity of 2,061 MW—citing several factors, including costs to comply with existing and future environmental regulations, economic conditions, and lower natural gas prices.

The Southern Co. subsidiary said it would ask the Georgia Public Service Commission (PSC) to decertify Units 3 and 4 at Plant Branch in Putnam County; Units 1 through 5 at Plant Yates in Coweta County; Units 1 and 2 at Plant McManus in Glynn County; and Units 1 through 4 at Plant Kraft in Chatham County. Kraft Unit 4 is oil- or natural gas–fired, and the McManus Units 1 and 2 are oil-fired, but the remainders are all coal-fired units.

The company will also ask for decertification of Boulevard 2 and Boulevard 3 combustion turbine generating units in Savannah after the PSC approves Georgia Power’s updated Integrated Resource Plan (IRP) that will be filed with the PSC on Jan. 31. Decertification of the two Boulevard units was sought due to the costs to repair and operate the units, the company said.

"The company expects to ask for decertification of the units, other than Kraft 1-4, by the April 16, 2015 effective date of the U.S. Environmental Protection Agency’s (EPA) Mercury and Air Toxics (MATS) rule," Georgia Power said in a statement. "The company expects to seek a one-year extension of the MATS compliance date for Plant Kraft, and retire those units by April 16, 2016. The PSC is expected to vote on the decertification request in the summer of 2013."

"We recognize the significant impact that these retirements will have on the local communities and we took that into account when making these decisions," said Georgia Power President and CEO Paul Bowers. "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. We are in the midst of a significant transition in our fleet that will result in a more diverse fuel portfolio—including nuclear, 21st century coal, natural gas, renewables and energy efficiency—to ensure we maintain our commitment for generations to come."

Georgia Power currently operates 11,387 MW of coal-fueled generation at 10 plants across the state. Overall, the company has 18,623 MW of capacity, including nuclear, natural gas, and hydro generation. Southern Co.’s coal-fired generation has already declined from 70% of its generating portfolio in 2006 to 52% in 2011.

Among newer plans to retreat from coal-fired generation are those that will switch Units 6 and 7 at Plant Yates to natural gas from coal. Additionally, Unit 1 at Plant McIntosh, near Savannah, will switch from Central Appalachian coal to Powder River Basin coal. "The fuel switches are the result of the company’s evaluation of the MATS rule, other existing and expected environmental regulations, and economic analyses," Georgia Power said in a statement.

The company also announced that the conversion at Plant Mitchell Unit 3, in Albany, from coal to biomass cannot be completed before 2017—if it should it move forward at all—owing to "continued regulatory uncertainty related to the Industrial Boiler Maximum Achievable Control Technology rule and other EPA rules."

Sources: POWERnews, Georgia Power

 

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