Two utility companies announced the closure of 10 aging U.S. power plants Wednesday, a move environmental groups hailed as a major victory even as critics warned it could raise the price of electricity.
Midwest Generation, which had come under intense pressure from environmental activists, Chicago residents and Chicago Mayor Rahm Emanuel, said it will retire its Fisk Generating Station in 2012 and Crawford Generating Station in 2014. Both have been operating for decades in the middle of the city’s southwest side.
Pedro Pizarro, president of Midwest Generation’s parent company, Edison Mission Group, issued a statement saying that in light of environmental rules being phased in over the next three years, “unfortunately, conditions in the wholesale power market simply do not give us a path for continuing to invest in further retrofits at these two facilities.”
The Environmental Protection Agency finalized rules in December that require utilities for the first time to curb the amount of mercury and other airborne toxins they release.
In its announcement, GenOn outlined a schedule for closing 3,140 megawatts of generation capacity in Ohio, Pennsylvania and New Jersey “because forecasted returns on investments necessary to comply with environmental regulations are insufficient.”
Mission spokesman Doug McFarlen said the firm did not plan to bring new capacity online to replace the two plants. “This is a reduction in our fleet size,” he said, adding that there is “a surplus” of electricity supply in the region.
GenOn did not say Wednesday how it planned to replace the retired capacity.
The closing of the Fisk and Crawford plants, in operation since 1968 and 1958, respectively, marks a major win for anti-coal activists and their allies in elected office. Last week, Emanuel warned Midwest Generation that it had a week to broker a deal on curbing pollution from the plants or face the prospect of a city council ordinance that would force the company to shut them down within two years.
Michael Brune, executive director of the Sierra Club, called the closures “a giant leap in our work to move America beyond coal.”
“This agreement means a cleaner, healthier environment for the communities around these coal plants,” said NAACP President Benjamin Todd Jealous. “For too long, Fisk and Crawford have been literally choking some of Chicago’s most diverse neighborhoods, and some of its poorest.”
But Carol Raulston, spokeswoman for the National Mining Association, cited the retirement as an example of how the federal government’s new air-quality rules could threaten the nation’s electricity supply.
“These announcements are further proof EPA has dangerously underestimated the impact of its unprecedented roll-out of rules on the reliability of the nation’s electricity grid, as the announced retirements of electricity plants already exceed EPA’s dubious estimate,” Raulston wrote in an e-mail.
According to Bruce Nilles, senior director for the Sierra Club’s “Beyond Coal” campaign, the generation Illinois will lose when the two Chicago power plants close will probably be replaced with a mix of natural gas and renewable energy, both of which are expanding in Illinois.
Bracewell and Giuliani partner Jeffrey Holmstead, who headed the EPA’s air and radiation office under President George W. Bush and now represents utility companies, wrote in an e-mail that new wind projects coming online cannot simply substitute for coal plants because wind power generation is intermittent. And gas units, according to Holmstead, face pipeline supply constraints that can “take years” to resolve.
“The cost of electricity will go up — and in some places (including Michigan, Ohio and Pennsylvania), it will go up a lot,” Holmstead wrote. “Existing coal-fired plants — even the old ones that don’t run very often — play a major role in controlling costs because they keep the marginal costs down during peak periods.”
In May 2011, eight Greenpeace activists climbed Fisk’s 400-foot smokestack and painted the message “Quit Coal” on it. The activists, who were arrested in the morning after staying overnight, still face charges stemming from the incident. Eight Greenpeace activists rappelled off the Pulaski Bridge in Chicago with a banner to stop a coal barge from delivering coal to the Crawford coal plant on the same day.
In January 2010, the Sierra Club announced it would work to retire 105,000 megawatts of coal-fired generation, replacing it with renewable energy by 2015; at this point, 106 coal plants, representing 43,000 megawatts of generating capacity, are slated for closure. New York Mayor Michael R. Bloomberg last year pledged to give the group $50 million over four years if it can ensure by 2015 that a third of the nation’s current coal plants are retired or slated for closure.