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Duke Energy Threatens Coal Plant Closure In Light of EPA MACT Rule

Duke Energy Ohio is threatening to decommission all six coal-fired generation units at a plant near Cincinnati, by Jan. 1, 2015, unless changes are made to a proposed U.S. Environmental Protection Agency regulation.

The energy company announced its intent to retire the six units at its W.C. Beckjord Station, – totaling 862 megawatts of generating capacity – in its 2011 Resource Plan filing with the Public Utilities Commission of Ohio on July 15.

Duke plans to retire the coal-fired units at the nearly 60-year-old plant (pictured) in 2015 due to the EPA’s recently proposed Utility Maximum Achievable Control Technology rule, which, among other things, requires new emission control technology to be installed at power plants.

The EPA intends to finalize the rule in Nov. 2011, with required emission control technologies to be installed by Jan. 1, 2015 – the date that Duke is anticipating closing its coal-fired units.

“The Beckjord Station decision is largely based on the age of the coal-fired units and the prohibitive cost – to which our customers would be exposed – of implementing the new MACT technology requirements,” Duke said in a statement. “The anticipated retirement date is contingent on potential changes to the implementation [of the] EPA’s MACT rule and other environmental regulations.”

Barring a change to plant economics – including variables like fuel costs, power prices, and capital and maintenance expenses – Duke Energy says it intends to continue operating the coal-fired units until the anticipated 2015 retirement date.

The company plans to meet demand following the retirement of Beckjord’s coal-fired units through the purchase of electricity on the competitive wholesale market or the construction or acquisition of natural gas-fired combined-cycle generating assets.

As well as the six coal powered units, the Beckjord Station is home to four oil-fired combustion turbines. Duke has no plans to retire the combustion turbines.

The plant employs about 120 staff. Duke says that people are likely to lose their jobs following the closure, but that some employees might be offered the opportunity to work at other Duke Energy plants.

In February, following industry pressure, the EPA released a revised planned MACT rule that it said brought down implementation costs on the energy sector by half. At the time the EPA also said it will “reconsider” certain aspects of the boiler and incinerator rules, and seek further public comment on those portions.

In June, four Republicans and four Democrats on the House Energy and Commerce Committee revealed legislation aimed at further delaying the MACT rules.

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16 thoughts on “Duke Energy Threatens Coal Plant Closure In Light of EPA MACT Rule

  1. How does Duke Energy know that it will be able to purchase or create enough power for all its customers after 2015? What if all the other utilities do the same thing–and no one has extra power to sell to Duke?

    If you think there’s deaths from the heat wave right now, just imagine what it will be like 4 years from now. And it won’t be due to “global warming,” either. EPA is destroying this country, deliberately, it seems.

  2. Great move. I am sure all the EL people here will say wind power and solar facilities can make up for it. The next step is for the top 10% wage earners and business leaders to shut their doors. Lets see how the this nation would run then.

  3. Wow, as an environmental professional I take that as a huge insult. Do you realy think after all of the damage done to human health and the environment by corporate America that we can trust them to manage their operations in a manner that won’t harm our health or kill us? NO, no, and hell no!

    Why has this country lost hundred of thousands of lives needlessly to asbestos, just to use one example. Why, because the corporations that use that material knew beyond a shadow of a doubt since the 1920’s that it caused people to get sick and die a painful, painful death. And what did they do with this knowledge? They buried it for 50 years until lawsuits forced them to open up their files. Meanwhile, hundreds of thousands of steamfitters, iron workers, steel mill workers, and veterans, especially Navy personnel were slain by intentional disregard for human health.

    If you think that EPA is destroying this county, go live for a year in one of the many countries around the world who don’t have a single sanitary landfill or where the wells are polluted by pesticides or herbicides or gasoline because there is no governmental agency to apply the rule of law to them and close them down when they violate those laws.

    Thank you EPA and EPA employees for everything that you do to regulate those that emit pollutants into our air, soil and water. Thank you to the Senators and Congressmen who have supported EPA’s work for all of these years.

  4. Why are we alarmend that a 60 year old plant might be shut down soon anyway? If it takes EPA rulings to weed out the dirtiest of old, inefficient power plants than so be it.
    Instead of clinging on to 120 jobs in a dying segment, promote new technology and modern infrastructure or promote efficiency and load response until a new unit comes online.

  5. Title should read – Duke Energy Promises Coal Plant Closure In Light of EPA MACT Rule

    Duke Energy refusing to make changes to get up to speed with technology reminds me of Borders Books’ reluctance to get into the e-reader/online market. I will miss Borders…Dirty Power Plants? Not so much. Leaves a big opportunity for renewable energy. Bring it on!

  6. I agree with Steve. I can’t see why this is labelled as a threat – surely just a closing of obsolescent equipment – big deal. Who flies around in DC3s any more?

  7. @Martin: To answer your question, Duke will know that it can produce and/or purchase enough power after 2015 in exactly the same way that they have always done so – by predicting demand and implementing plans to meet that prediction. It’s that simple – and there is nothing new in the mix now, just because they may have to shut down some dirty, 60-year-old plants. Plants that were probably designed for a useful life of just 30 years, and have been subsequently pressed into an additional 30 years of use despite the toll of age on plant components.
    And it’s simply ridiculous to claim that the EPA is destroying this country, deliberately or otherwise. I add my voice to that of Greenpro: if you think that EPA is destroying this county, go live (permanently, please) in one of the many countries around the world without a governmental agency to apply the rule of law to polluting companies and close them down when they violate those laws.

    @Matt – yes, this is a great move. And as the article clearly pointed out, only 120 workers are even potentially affected (I laugh at your silly extrapolation to the top 10% of wage earners and business leaders nationwide!). Duke did not even claim that all those jobs would be lost; and furthermore some displaced workers – if indeed there are any – would probably be offered Duke jobs at other facilities. After all, companies bleating about new requirements nearly always vastly overestimate any economic costs of compliance. It may well be that Duke will end up employing more workers overall as they comply, than would have been the case otherwise.

  8. Doug/GreenPro, thanks and don’t bother reasoning with Martin and Matt…we all know it’s a lost cause. Just ashamed they have made their way to another blog where typically intelligent discussion occurs.

  9. Well said C. Thank you.

    If Duke is a “for profit” company, why would customers absorb the cost of retrofitting? They should have been reserving capital money like any profitable company does. hmmm..
    A public utility, not-for-profit, would have to follow this process but again, money should have been reserved. And come on, it’s not like anyone didn’t see this coming 20 years ago, never mind 5 years ago when Gore started his mission! I am confused as to why funding from other sources cannot help offset the costs. Maybe they should have a lottery…funding the new electricity plant so there is power after 2015. Win a 10 kilowatt solar array! If they do it right, they could reduce their demand load by a megawatt by 2015.

  10. MACT standards for power plants are way overdue–according to law (Clean Air Act amendments passed by Congresses under presidents of both parties).

    Studies of impacts of new environmental regulations (this MACT plus several others) show that plants most likely to be closed are the oldest, least efficient, and often lacking modern pollution controls (therefore most damaging to public health)–plant in article is 60 years old. Newer, cleaner, more efficient plants will keep operating with perhaps some requiring pollution control upgrades. Newest plants with good scrubbers may meet new standards already.

    Generation reserve capacity in the Midwest is pretty good. Existing and new gas-fired plants can more cleanly meet new demand (plus some renewables plus investments in improving energy efficiency and reducing peak demand). By the way, EPA, Dept of Energy, and states have authority to alter the compliance schedule to assure that grid reliability isn’t compromised (don’t want a bunch of major plants simultaneously shut for upgrades, instead, phase them).

    The article gives more prominence to possible job losses from closure of the dinosaur coal plant than to the plan to replace with gas-fired capacity. Not fair to underplay construction, O&M, and gas-related jobs from modernizing our power infrastructure.

    Regarding comment: “If Duke is a “for profit” company, why would customers absorb the cost of retrofitting? They should have been reserving capital money like any profitable company does. hmmm.”
    –That makes sense for normal businesses (for some things). Utilities are regulated monopolies. The state (utility commission or similar body) regulates what they can charge based on costs to provide the service plus a rate of return. So the state (util commission) must approve any investments that will be paid by customers (“ratepayers”–you and me). States won’t allow utilities to raise your bill now in anticipation of a plant that maybe would need to be built in the future,
    –Regarding capital reserves, typically utilities or other businesses don’t save up money so they can plunk down hundreds of millions or billion dollars cash for a new plant. Instead they borrow the money (bonds) and pay back through revenues. Just like you or I taking out a mortgage and paying it off over time from our paychecks.

  11. Does anyone know what the energy efficiency and maintenance of these geriatric plants are? I suspect that customers would be better served with new facilities that produce more power with less fuel and cost a lot less to operate. Would a new plant even need to hire 120 employees? I’m sure that Duke has looked into all these issues to conclude that these plant are money pits, not worth any further investment of any sort.

    I’m sure it’s politically convenient to blame the EPA for all their trouble. Moreover, I worry that the buying power on the open market will expose their customers to rate spikes, even “rolling blackouts,” due largely to financial volatility in energy futures. Financial derivatives are no substitute for real productive capacity. Will Duke executives take responsibility for their failure to make timely capital investments in efficient productive capacity or feign regulatory victimhood? If I were a shareholder, I would not be much impressed with this management.

  12. Ok… This perspective from an employee at Beckjord Station. I am a maintenance contractor at the plant. Yes it’s old and some of the technology is outdated, but in all honesty, the old equipment isn’t in all that bad of shape. All plants, old or new, will have things break. The process of making power is tough on things.

    There seems to be some focus on those 120 jobs. Well, let’s look at the bigger picture. The town in which Beckjord operates survives on the tax revenue from the plant. The school district here will lose 30% of it’s operating budget. The county will lose several hundred thousand a year. Guess what happens without that tax money? Other businesses lose customers. Teachers lose their jobs because the money isn’t there to pay them. Fewer teachers means that children aren’t as well educated. The town is forced to do layoffs, and fire/police/emt services are cut. In addition to those 120 Duke jobs being cut, over 100 contract workers will be cut, including yours truly.

    I’m not looking for sympathy here. I understand its part of life. Is coal the best way? No, and we can agree on that. But as far as producing enough megawatts to meet demand, it is still the most viable solution (unless we’re talking about a Nuke plant…different argument there).

  13. To the person who compared this potential shutdown to Borders: these two things are NOTHING alike. In the instance of Borders the free market was what forced the company out of business. Their inability to manufacture, and more importantly market an e-reader on par with Barnes & Noble and Amazon is what caused their doom. Other companies used innovation and technology to change the way people read books and Borders simply failed to adapt to changing times. E-readers didn’t become popular because Government regulations made them cheaper and more widely available, that was entirely the result of businesses investing in the technology so they could make a profit.

    In this case you have unelected bureaucrats passing regulations that have the force of law and are backed up at the end of a gun. All of this without going through our representatives in Congress who should be making the laws. These draconian measures put undue economic strain on the businesses, forcing them to adapt their business model not because of market conditions, or in the interest of themselves and their customers, but because of misguided environmental crusaders who if you cornered them in a moment of truth would admit they’d just as soon “mother earth” not have any humans “scarring her surface.”

    The result of this is that we the people do not have a say in the marketplace, nor are we represented in Congress. The result will be higher prices as plants are forced out of operating before they were due to be retired, and lost jobs and tax revenue to the communities involved.

  14. Chris,

    Your comment about unelected bureaucrats is completely misleading. The fact is that all federal bureaucrats were selected by elected officials at some point. That selection process was open and was subject to voter input. The elected officials making those selections could have been recalled by vote at any time, if the voters didn’t like what their elected officials had just done. So we have not lost our representation in government, contrary to your statements. Our representation is still there, and you can still ask your congressional representatives to consider altering those bureaucratic decisions. Rest assured, though, that I and many others will likewise be petitioning our representatives to ensure that this particular bureaucratic decision is left untouched; because we agree with it and with the intent.

    And as far as any lost jobs or tax revenues are concerned, let’s just wait and see what the replacement plans are for this retiring dinosaur (that was probably originally “due” to be retired 30 years ago). It may well be that those ‘lost’ jobs will end up re-appearing at a newer, more efficient, plant – along with all those ‘lost’ tax revenues.

    Your statement that “These draconian measures put undue economic strain on the businesses”; is also false. Remember, the plant in question is 60 years old. That’s probably well past it’s original designed lifetime. Moreover, I personally thank all those “environmental crusaders”. They help protect the environment that allows you and I to live, and that represents the best legacy we can leave to our children. No one is truly motivated by a desire that there be no humans on the face of the earth! That charge is simply ridiculous.

    Finally, your use of overly dramatic statements like “backed up at the end of a gun”; are inappropriate. No one is waving any guns with respect to this story. Such inflammatory rhetoric is merely an attempt to scare people into accepting your views on this story. But I for one do not.

  15. Fascinating. Chris, please bestow upon us the basis for all of your “facts” and observations.

    You’ve brought blanket attacks, argument framing, prejudice, and unsubstantiated guesses.

    You literally brought NOTHING of value to the discussion, including your own provincial view.

    I may sound like one of those “misguided environmental crusaders”, but because of the trash you posted – you should be fined for littering on the internet.

  16. When these companies shut the plants down I am sure we will not sell the coal to other countries will we? I’m know our goverment and the EPA wouldn’t let that happen. If we are wanting to do away with fossil fuels surely we would’nt sell it for someone else to burn.

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