New EPA rules threaten dozens of power plants

WASHINGTON – At least 32 mostly coal-fired power plants in a dozen states will be forced to shut down and an additional 36 might have to close because of new federal air pollution regulations, according to an Associated Press survey.

Together, those plants produce enough electricity for more than 22 million households.

The effect will be most acute for the towns where power plant smokestacks long have cast a shadow. Tax revenues and jobs will be lost, and investments in new power plants and pollution controls will raise electric bills.

The survey, based on interviews with 55 power plant operators and on the Environmental Protection Agency’s own prediction of power plant retirements, rebuts claims by critics of the regulations and some electric power producers.

They have predicted the EPA rules will kill coal as a power source and force blackouts, basing their argument on estimates from energy analysts, congressional offices, government regulators, unions and interest groups. Many of those studies inflate the number of plants retiring by counting those shutting down for reasons other than the two EPA rules.

The AP surveyed generating companies about what they plan to do and the effects on power supply and jobs.

The estimate also was based in part on EPA computer models that predict which fossil-fuel generating units are likely to be retired early to comply with the rules, and which were likely to be retired anyway.

The agency has estimated that 14.7 gigawatts, enough power for more than 11 million households, will be retired from the power grid in the 2014-15 period when the two new rules take effect.

The first rule curbs air pollution in states downwind from dirty power plants. The second, expected to be announced Monday, would set the first standards for mercury and other toxic pollutants from power plants.

Combined, the rules could do away with more than 8 percent of the coal-fired generation nationwide, the AP found. The oldest and dirtiest plants would be sacrificed.

These plants have been allowed to run for decades without modern pollution controls because it was thought that they were on the verge of being shuttered by the utilities that own them. But that didn’t happen.

Other rules in the works, dealing with cooling water intakes at power plants and coal ash disposal, could cause the retirement of additional generating plants.

While the new rule heralds an incremental shift away from coal as a power source, it’s unlikely to break coal’s grip as the dominant domestic electricity source. Most of the lost power generation will be replaced, and the coal-fired plants that remain will have to be cleaner.

“In the industry, we retire units. That is part of our business,” said John Moura, manager of reliability assessment at the North American Electric Reliability Corp. NERC represents the nation’s electrical grid operators, whose job is to weigh the effect a plant retirement will have.

With so many retirements expected, that process could get rushed. “We are getting a little hammered here, because we see multiple requests,” Moura said.

NERC, along with some power plant operators, is pressing the Obama administration to give companies more time to comply with the rules to avoid too many plants shutting down at once.

In addition to anticipated retirements, about 500 or more units will need to be idled temporarily in the next few years to install pollution controls. Some of those units are at critical junctions on the grid and are essential to restarting the electrical network in case of a blackout, or making sure voltage doesn’t drain completely from electrical lines, like a hose that’s lost its water pressure.

“We can’t say there isn’t going be an issue. We know there will be some challenges,” Moura said. “But we don’t think the lights are going to turn off because of this.”

That hasn’t stopped some critics from sounding alarms.

Rep. Darrell Issa, R-Calif., said in a letter to the White House this month that the EPA mercury rule could “unintentionally jeopardize the reliability of our electric grid.” At a speech in New Hampshire in November, GOP presidential candidate and former Utah Gov. Jon Huntsman predicted summer blackouts. A recent U.S. Chamber of Commerce ad said a single EPA regulation “could threaten America’s energy supply.”

Particularly at the older, less efficient plants most at risk, coal already was at a disadvantage because of low natural gas prices, demand from China and elsewhere that was driving up coal’s price, and weaker demand for electricity.

For many plant operators, the new regulations were the final blow. For others, the rules will speed retirements already planned to comply with state laws or to settle earlier enforcement cases with the EPA. In the AP’s survey, not a single plant operator said the EPA rules were solely to blame for a closure, although some said it left them with no other choice.

“The EPA regulation became a game changer and a deal changer for some of these units,” said Ryan Stensland, a spokesman for Alliant Energy, which has three units in Iowa and one in Minnesota that will be retired, and four in Iowa that are at risk of shutting down, depending on how the final rules look. “Absent the EPA regulations, I don’t think we would be seeing the transition that we are seeing today. It became a situation where EPA broke the back of coal.”

Some believe the change is long overdue.

“Many of them are super old. They’ve either got to be brought up to code, fixed with the best available technology, or close them down,” said Sen. Barbara Boxer, D-Calif., who heads the Senate Environment and Public Works Committee. “You can’t keep on going.”