As the reality of new Environmental Protection Agency emission standards begin to settle in the United States, utilities continue to close older coal and oil-fired power plants.
The latest utilities to announce closures in the face of the new Mercury and Air Toxics Standards (MATS) are Texas-based GenOn Energy, Inc and Midwest Generation which separately announced plans to retire plants on Wednesday.
GenOn Energy, which was formed through a merger between Mirant Corporation and RRI Energy, Inc., said it is planning on closing eight coal-fired and one oil-fired power plant between June 2012 and May of 2015. The largest plant is the 732 MW coal burning Avon Lake facility in Ohio. In all, the utility will close 3,140 of generating capacity, which is just over 13% of GenOn's total generation portfolio.
All of the planned closures are because the company's "forecasted returns on investments necessary to comply with environmental regulations are insufficient." When looking at its 2011 revenues it becomes apparent why GenOn is trying to cut losses. The company posted revenues of $632 million, down $16 million from 2010 numbers.
Midwest Generation, facing mounting pressure from local Chicago residents and the EPA standards, agreed to shut down its Fisk and Crawford plants. Located in Chicago’s Pilsen neighbourhood, the 326 MW Fisk power plant, commissioned in 1968, will shut down in December. The 532 MW Crawford plant in Little Village neighbourhood, commissioned in 1958, will be retired in 2014.
Shutting down old and seemingly dirty, out of date coal generation is a growing trend among big utilities in the United States. Most claim that President Obama and his Administration are hurting Americans by imposing new emission standards and closing these generation facilities, as these closures will leave serious gaps in needed electricity.
Since late January (shortly after MATS went into effect) Ohio-based First Energy Corp. has announced plans to retire 3,349 MW in coal-fired capacity which represents 13% of its generation portfolio.
FirstEnergy Generation president James H. Lash has said making "additional investments to implement MATS" in order to use the company's old coal-fired generation is unlikely.
On the other hand, environmental groups are hailing the closures as a win. Faith Bugel, lawyer with the Environmental Law and Policy Center, told Medill Reports: "The closures set a really important precedent. Communities have really suffered because of the pollution. They can have a say and they can organize and be heard and make a difference at a local government level as well as with the companies that own the plants."
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