Southern Co. regulators fret over EPA rules

Coal Trader (11-Aug-11)

By Mark Watson

State regulators in Southern Company’s footprint are working to mitigate the cost and reliability effects of what one Georgia Public Service Commission member calls a “train wreck” of new federal environmental rules.

The way Southern Co mitigated it was by volunteering to be the first in America to comply to the non-existent Cap and Trade?  No, they put the burden to pay for the Kemper Plant upon the people of Mississippi.

Last week, Southern, the nation’s second-largest coal-fired electricity generator, filed at the Environmental Protection Agency an estimate that its subsidiaries would have to pay $13 billion to $18 billion to comply by 2020 with the so-called maximum achievable control technology rule to cut mercury and other toxic emissions.

The parent company of utilities in Alabama, Georgia, Florida and Mississippi estimates that the new rules could result in about 40% of its 26,199 MW of installed coal-fired capacity either being retired or transitioned to natural gas.

On Monday, a Southern spokeswoman said any of this coal-fired generation that is not highly controlled – defined as lacking both sulfur dioxide scrubbers and devices to control the emission of nitrogen oxide – is “on the table” for possible retirement.

What Kemper is all about is capturing 60% carbon dioxide let’s not misguide the public.  We are all about minimizing pollution but Carbon Dioxide is not a pollutant.

More than half of Southern’s coal-fired generation – 14,267 MW, to be exact – lacks one or both types of air emissions control equipment. Here are the numbers, broken out by state:

**Alabama – 8,729 MW of coal-fired generation, of which 4,410 MW is not highly controlled, with the highest concentration of highly controlled capacity in northern Alabama;

**Florida – 1,573 MW of coal-fired generation, of which 438 is not highly controlled, with all of the highly controlled capacity in the western Panhandle;

**Georgia -14,301 MW of coal-fired generation, of which 7,823 MW is not highly controlled, with the highly controlled capacity in northern Georgia; and

**Mississippi -1,596 MW of coal-fired generation, none of which is highly controlled, with all of it concentrated along the Gulf Coast.

Also last week, Southern’s Georgia Power subsidiary asked the Public Service Commission to retire the Mitchell Plant’s unit 4C, with 33 MW of capacity, in March 2012, and to retire the Branch Plant’s Units 1 and 2, totaling 569 MW, effective at the end of 2013. The Mitchell Plant is in southern Georgia, and the Branch Plant is in central Georgia.

Mississippi will be retiring plants as well.  This is being kept confidential until after the elections. But jobs will be lost.

Georgia Power also seeks certification of four power purchase agreements totaling 1,562 MW of capacity found through a request for proposals for periods that begin in 2015 and extend 12 to 15 years thereafter.

“I believe that through our [integrated resource plan] process … we’ll continue to see Georgia without a reliability issue, but at what cost remains to be seen,” said Stan Wise, Georgia PSC chairman, on Tuesday. “It’s something my colleagues and I are very concerned about. Clearly, it’s an exceptionally tight time line for what has been a 50% coal generating state. We’re going to see a dramatic change in the way we’ve done business in this state.”

In an email, Georgia PSC member Tim Echols said, “Georgia Power has a great record of reliability. That will not be an issue, regardless of fuel.”

Wise said he has discussed what he called “the train wreck we’re facing in the next decade” with Georgia’s senators. While the commission has ordered the installation of air scrubbers, these processes take time, and the short deadlines in the EPA rules may leave Georgia regulators with “the only avenue we have in this state … to shutter a plant or transfer it to another fuel source.”

We should be joining forces with Texas to fight overbearing irrational regulations the Obama administration is laying out to destroy our economy.  The timeline should be delayed!

In contrast with the Electric Reliability Council of Texas, Georgia lacks a large amount of underutilized gas-fired generation capacity controlled by independent power producers, Wise said.

But an industry observer who works with independent power producers in the region said the Southeast may, in fact, have underutilized gas generation that would be available to fill in the gap from Southern’s retired coal-fired generation.

“There are many, many less independent power producers there than in the past, but I wouldn’t make a blanket statement that the generation’s not there,” said the observer, who asked that his name not be used. “Historically, they haven’t been run very much.”

Replacing coal-fired generation with new gas-fired generation, which would be funded by ratepayers, could mean a big blow to Georgia consumers. “You can be sure that when the costs of these rules are passed on to the ratepayers, it will get their attention,” Wise said.

But Echols said he has “no worries as long as natural gas prices stay down.”

In Mississippi, Leonard Bentz, the PSC member who represents the Gulf Coast region served by Southern’s Mississippi Power subsidiary, said it would be “irresponsible” for utilities to switch much of its generation to natural gas.

What is irresponsible is to force the people of MS to buy an experimental Lignite Coal plant in compliance to Obama’s Green agenda. And even worse, was to do it secretly.

“Do you think for one second that gas prices are going to stay low?” Bentz said Tuesday. “I don’t. … I’m not going to be a part of getting gas-heavy on generation. You need a good, diversified fuel mix.”

This is all about deception folks.  Steven Chu  expressed his goal to “bankrupt” every coal plant in America through regulations.  Bentz said, Let Mississippi be first.  And make the ratepayer buy the plant but not to increase the rates until after his re-election. 

It would be equally irresponsible to shut down Mississippi Power’s coal-fired generation when the utility regularly hits records for summer demand, as it has done in the past two years, Bentz said.

It is criminal to force one of the poorest states to buy a risky coal plant scam causing the poorest to suffer to their deaths in the heat. Say it will bring jobs as businesses close and lay-off.   But Bentz did just what Obama wanted.

“Reliability is probably one of the biggest determining factors in my decision-making process, a fraction above cost,” Bentz said. “When people’s bills get high, the phone rings off the wall, but when the lights go out, the phones blow up from all of the calling.”

Following the political agenda seems like the determining factor.  It took only 72 hours to change the minds of the Bentz and Posey after recieving the persuasive letter from Haley Barbour who was hoping for a presidential run at the time and kissing up-to liberals. 

In a joint e-mail, the Alabama PSC said it learned from Alabama Power that “under the currently proposed implementation schedules, reliability will be jeopardized.”

“For that not to occur, the EPA must extend its stringent compliance periods and adopt a more flexible approach,” states the e-mail. “Otherwise, customers could potentially suffer reliability impacts and incur unnecessary costs due to compliance penalties, inflationary pressures, material supply and labor shortages, as well as the potential for multiple outages occurring at one time.”

The Alabama commissioners’ email said they “plan to maintain an open dialogue … concerning these issues” with their congressional delegation and other government officials.

Bentz said he has been discussing the new EPA rules with Mississippi’s congressional delegation.

But not discussing it with the people of Mississippi.  Again I want to see a fight against Cap and Trade not a volunteer to be the first to comply mentality.  Bentz keeps saying, “We will be the first in energy.”  But what he means is, we will be the first fools to be involved in the “train wreck.”

But Echols said he expects that Congress will not forestall the EPA rules unless Obama loses the 2012 presidential election.

“The EPA is a powerful agency,” Echols said.

Mark Watson

The red italics is inserted opinions and is not part of the original Coal Trader article in black. Brandon Presley voted against the Kemper County Lignite coal plant and has been an advocate for the people of Mississippi on this topic.

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