Less Coal, More Cost

Power Company Loses Some of Its Appetite for Coal by Eric Lipton

New York Times, Published: December 19, 2012 WASHINGTON — Coal took another serious hit Wednesday — in the heart of coal country.

The Big Sandy power plant in eastern Kentucky. Its owners said it would shut down the facility’s coal-burning furnaces in 2015.

American Electric Power, or A.E.P., the nation’s biggest consumer of coal, announced that it would shut its coal-burning boilers at the Big Sandy electric power plant near Louisa, Ky., a 1,100-megawatt facility that since the early 1960s has been burning coal that was mined locally.

Big Sandy this year became a symbolof the plight of the coal industry nationwide. Strict new environmental regulations are forcing large utilities to spend billions of dollars to retrofit old coal-burning plants or shut them down, replacing them in most cases with equipment that uses cleaner-burning natural gas.

A.E.P., which is based in Ohio, has repeatedly changed its mind over what to do with Big Sandy, a big employer in eastern Kentucky, both at the 120-employee plant itself and in the Appalachian-area coal mines that feed it 2.5 million tons of coal each year.

In May, the power company withdrew a plan to spent $1 billion to retrofit Big Sandy so that it could continue to operate. But that would have required a 31 percent increase in electricity rates for eastern Kentucky residents.

On Wednesday, A.E.P. announced that it would close both of the coal-burning furnaces at Big Sandy in 2015, but left open the possibility that one of the units would be retrofitted to use natural gas. Area residents, if the Kentucky Public Service Commission approves the plan, would see an 8 percent increase in their electricity rates — to replace Big Sandy’s production with electricity from West Virginia — much less than the earlier plan

But the decision still hurts, said State Representative Rocky Adkins, a Democrat who represents the area.

“It’s kind of like we have had our heart and soul taken from us,” said Mr. Adkins, who also is the majority floor leader of the Kentucky House. “The impact on the economy here is just going to be devastating.”

This has been a bad year for the coal industry.

A total of 55 plants, including Big Sandy, have closed or have announced plans to shut down, according to a count by the Sierra Club. That will leave 395 coal-burning plants in the United States, compared with 522 in 2010, according to the Sierra Club.

Last week, Dynergy of Houston announced that its Danskammer coal-burning power plant near Newburgh, N.Y., which was damaged during Hurricane Sandy, would alsoclose permanently. Last month, Patriot Coal, based in St. Louis, which filed for bankruptcy this year, announced it would be shutting down its Bluegrass Mine Complex near Henderson, Ky., one of dozens of mines that are reducing production or closing operations as electric utilities shift at a record rate from coal to natural gas.

Nationwide, coal production dropped this year by an estimated 7 percent even as exports grew to Asia and Europe, according to the Energy Department.

Politically, this has been a disappointing year for the coal industry as well. Industry executives contributed heavily to Mitt Romney’s presidential campaign, while also sending large donations to important Congressional races, like Senate contests in Ohio, Virginia and Montana, in which their preferred candidates lost.

“Anyway you count it, this is the worst year ever for coal,” said Bruce Nilles, one of the managers of the Sierra Club’s Beyond Coal campaign. “And to see Big Sandy added to the list — it underscores how the economics of coal have turned so fast. This is eastern Kentucky, a place where the state was willing to do a lot to save it.”

Mr. Adkins said the repercussions in eastern Kentucky will last for decades, adding that local hotels, trucking companies, and even schools, would be adversely affected by the shutdown.

“We will get up, dust ourselves off and we will try our best to move forward,” Mr. Adkins said.

Luke Popovich, a spokesman for the National Mining Association, said that there remained hope that the price of natural gas would rise in the coming year, making coal more competitive. He said surging demand in India and China could help replace declining domestic sales.

“We have the most of the fuel — coal — that the rest of world wants the most of,” he said.

Source:  New York Times, www.nytimes.com 

 

Comments:

Coal and Nuclear power costs 2 cents per kwh.  Natural gas fired power costs 4 cents per kwh.  Wind and Solar costs over 10 cents per kwh. As we allow the government to close coal and hydroelectric plants due to bad science, the global warming hoax and the carbon capture scam, we allow EPA and UN overreach.  We force our electric utilities to bow down to the false carbon god and double our electric rates.  We’ve already lost 10% of our coal fired plants and will experience immediate electric bill increases as these losses begin to hit Georgia  If we insisted on real science and incorrupt government, we wouldn’t need to do any of this.

Norb Leahy, Dunwoody GA Tea Party Leader