Stricter environmental regulations have led to Georgia Power asking state regulators for permission to shut down 15 coal-fired and oil-fired generators, totaling more than 2,000 megawatts of electricity generating capacity.
The company expects to ask for decertification most of the coal-fired units by April 16, 2015 — the effective date that the U.S. Environmental Protection Agency’s Mercury and Air Toxics rule will go into effect.
The company expects to seek a one-year extension for MATS compliance for their Plant Kraft, and retire those units one-year later.
The EPA estimated annual costs of compliance of MATs would be $10.2 billion.
“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 Paul Bowers, president and CEO of Georgia Power.
“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,” he added.
The company cited several factors for the shutdowns, including the compliance costs for current and future environmental regulations, as well as economic conditions and low natural gas prices.
“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,” Bowers said.
The company also requested that two units at one power plant be switched from coal to natural gas, and said that a conversion from one unit at another power plant from coal to biomass could not be finished before 2017.
Georgia Power said it’s installing additional environmental controls to comply with environmental regulations at the remaining coal-fired generators.
Reuters reports that U.S. generators have announced to shut down 40,000 megawatts of coal-fired power plants over the past few years due to cheap natural gas and stricter environmental regulations. Low natural gas prices have made companies unwilling to spend millions upgrading emissions systems to meet ever increasing federal and state environmental regulations.
A study conducted by National Economic Research Associates for the American Coalition for Clean Coal Electricity found that over the next four years companies will be forced to shut down between 54,000 and 69,000 megawatts of coal-fueled electricity generation, mainly due to the EPA regulations.
The study estimated the compliance costs would force electricity generators to spend $15 billion to $16.7 billion annually over the next two decades.
State regulators are expected to vote on the company’s decertification request this summer.
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