Friday, January 27, 2012

Obama administration begins turning off the lights

Part of yesterday's news release from a regional utility:

AKRON, Ohio, Jan. 26, 2012 -- FirstEnergy Corp. (NYSE: FE) announced today that its generation subsidiaries will retire six older coal-fired power plants located in Ohio, Pennsylvania and Maryland by September 1, 2012. The decision to close the plants is based on the U.S. Environmental Protection Agency Mercury and Air Toxics Standards (MATS), which were recently finalized, and other environmental regulations. 
The total capacity of the competitive plants that will be retired is 2,689 megawatts (MW). Recently, these plants served mostly as peaking or intermediate facilities, generating, on average, approximately 10 percent of the electricity produced by the company over the past three years. 
The following plants will be retired: Bay Shore Plant, Units 2-4, Oregon, Ohio; Eastlake Plant, Eastlake, Ohio; Ashtabula Plant, Ashtabula, Ohio; Lake Shore Plant, Cleveland, Ohio; Armstrong Power Station, Adrian, Pa.; and R. Paul Smith Power Station, Williamsport, Md. 
In total, 529 employees will be directly affected. Existing severance benefits will apply to eligible, affected employees. However, the final number of affected employees could be less as some are considered for open positions at other FirstEnergy facilities and work locations, and eligible employees take advantage of a retirement benefit being offered to those 55 years and older.
"This decision is not in any way a reflection of the fine work done by the employees at the affected plants, but is related to the impact of new environmental rules," said James H. Lash, president, FirstEnergy Generation and chief nuclear officer. "We recently completed a comprehensive review of our coal-fired generating plants and determined that additional investments to implement MATS and other environmental rules would make these older plants even less likely to be dispatched under market rules. As a result, it was necessary to retire the plants rather than continue operations."
FirstEnergy isn't the only utility shuttering capacity. Last June, I compiled a list of other utilities being forced to take long-productive coal powered resources off-line.

Environmentalists and the EPA tell us the closures are vital in the interest of cleaner air and water. But the question no one seems to be answering (or even asking):  How much electrical generation capacity can America lose in the government's coal-fired purge without greatly increasing the risk of local or regional blackouts and brownouts? And how much more will customers have to pay as government regulations make electricity more scarce?

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