By Michael Bastasch
A coal-fired power plan that’s operated for more than 100 years is shutting down, and its owners say Obama-era regulations are to blame.
Alabama Power’s Plant Gorgas will officially close in April. It’s only the latest coal industry casualty, driven by Environmental Protection Agency regulations and market forces.
“We recognize that Plant Gorgas and the men and women who have operated it have brought great value to Alabama Power, our customers and the local community,” Jim Heilbron, Alabama Power’s senior vice president, said in a statement issued Wednesday.
“We are also concerned that more regulations are on the horizon that could require additional, costly expenditures at the plant,” Heilbron said.
Heilbron said federal regulations for handling coal ash and wastewater made it too costly to continue operating Plant Gorgas. Those regulations were put in place under the Obama administration.
Coal plant retirements spiked during former President Barack Obama’s time in office as his administration put in place costly regulations amid a boom in natural gas production. Low natural gas prices have persisted, putting more pressure on coal plants facing high compliance costs.
Obama-era regulations for wastewater, for example, were estimated to cost coal operators $2.5 billion a year, though utilities said EPA vastly underestimated compliance costs.
The Trump administration put the wastewater rule under review in 2017, but nothing seems to have happened since. Trump’s EPA put the rule under review in response to a petition from utilities.
Alabama Power estimates it would cost $300 million to comply with federal environmental regulations and keep its three remaining coal-fired generators running. Plant Gorgas has been in operation since 1917.
The company said closing down Plant Gorgas would not impact reliability, and that federal regulations are forcing them to take a hard look at their power portfolio.
“Alabama Power is focused on providing our customers reliable, affordable electricity while protecting the environment we all share,” Heilbron said.
The effects of Plant Gorgas’ closure will likely ripple upstream to its suppliers. More than half of U.S. coal mines have closed since 2008 as coal plants close their doors and suppress demand.
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