Gulf Power to retire 100-MW Scholz coal plant by April 2015

The Gulf Power unit of Southern Co. (NYSE: SO), in a move that was no surprise, said March 22 that it plans to close its coal-fired, little-used Scholz power plant in Sneads, Fla., by April 2015.

The company said stricter regulations imposed by the U.S. Environmental Protection Agency have forced the closure of Plant Scholz, which has operated since 1953. When Gulf Power evaluated the cost to retrofit the plant to meet EPA regulations, the utility said decided it was better to close the plant. April 2015 is when EPA’s Mercury and Air Toxics Standards take effect.

Over the next two years, the plant will continue to operate. At the end of that time, plant employees who are not planning to retire will be transitioned to other jobs within the company, Gulf Power noted.

At one time, Plant Scholz was Gulf Power’s flagship plant. Its two generating units can produce a total of 100 MW.

“Over time, Plant Scholz has been one of the most reliable plants in the Southern Company system,” Stan Connally, Gulf Power President and CEO said. “It’s provided affordable, reliable electricity for our customers for 60 years — and helped this region grow.”

Even with the closure of the plant, Gulf Power will still be able to generate enough electricity to supply its customers in Northwest Florida. In addition, the utility noted that it is part of Southern Co. and interconnected with sister companies Georgia Power, Mississippi Power and Alabama Power. Its other coal-fired capacity is at its Lansing Smith and Crist power plants in Florida, and a co-ownership position along with Mississippi Power at the Daniel plant in Mississippi. Last year, Gulf Power permitted new air controls at Lansing Smith, but also included the option of shutting the plant if the air controls didn’t turn out to be the economic choice.

None of Gulf Power’s coal-fired capacity has been running particularly hard lately due to slumping power demand and cheap natural gas. In August 2012, the utility filed projected 2013 capacity factors for its coal units at the Florida Public Service Commission. Notable is that a well-maintained coal unit in a strong electricity market should be able to achieve a capacity factor of 80% or more.

  • The biggest Crist coal unit (at 475 MW), Crist Unit 7, was projected for only a 45.3% capacity factor in 2013, with a burn of 895,775 tons of coal. Crist Unit 6 had a projected capacity factor of only 14.2%, Crist Unit 5 at 30% and Crist Unit 4 at 28%.
  • The two Scholz units were projected at capacity factors in 2013 of only 5.1% and 4.3%.
  • The coal-fired Smith Unit 1 was projected at 39.5% and Unit 2 at 31.2%, while the gas-fired Unit 3 at Smith had a projected capacity factor of 82%. Gulf Power has said cheap natural gas is displacing coal-fired generation on its system.
  • Daniel Unit 1 had a 2013 projected capacity factor of 22.9%, while Unit 2 was at only 15.4% in those August projections.

In a separate August 2012 filing at the Florida PSC, the utility noted that the Scholz plant is served by CSX Transportation rail. Scholz was projected to burn 16,000 tons of coal in 2013 and must comply with a state SO2 emission limit of 6.17 lbs of SO2/MMBtu. Scholz has burned Central Appalachian coals. Because Scholz is considered a peaking plant, its fuel supply will be based on limited-term, firm commitments and/or spot purchases depending on burn projections. Contract commitment terms will be two years or less. If commitments are made for more than 50% of projected burn requirements, the contract will match the maximum annual tonnage purchased to the plant burn requirements, the utility reported.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.