Gulf Power to retire Lansing Smith coal units in March 2016

Culminating a long process to get there, Gulf Power announced Feb. 6 plans to retire the two coal-fired units at the Lansing Smith plant, located near Panama City, Fla., by March 31, 2016.

The company said stricter regulations imposed by the U.S. Environmental Protection Agency have forced the retirement of Units 1 and 2 at Smith — units that have operated since the mid-1960s. When Gulf Power evaluated the cost to meet EPA regulations, the utility decided it would be in their customers’ best interest to retire the units.

Plant Smith will continue to operate and produce electricity with its state-of-the-art combined-cycle natural gas unit, which went into service in 2002. Plant Smith’s reliable coal units can produce a total of 375 MW.

“Employees at Plant Smith have ensured Units 1 & 2 have been workhorses for our system for nearly 50 years,” said Stan Connally, Gulf Power president and CEO. “And this plant will continue to provide affordable, reliable electricity for our customers well into the future with our natural gas unit.”

Gulf Power noted that its remaining capacity includes electricity from “flagship” coal facility Plant Crist, which added a $650m scrubber in 2009. In addition, the utility is part of Southern Company and interconnected with sister companies Georgia Power, Mississippi Power and Alabama Power. The company has indicated sinc2 2013 that it plans to retire the small, old and little used Scholz coal plant. The Scholz plant is scheduled to close in April 2015.  Its two generating units can produce a total of 100 MW.

Lansing Smith had been in danger for some time of closing. In an August 2014 filing at the Florida Public Service Commission, Gulf Power had projected that in 2015, the capacity factors for these units would be very low: Lansing Smith Unit 1 (162 MW net), 9.5%; and Lansing Smith Unit 2 (195 MW net), 8.9%.

At one point earlier this decade, the utility planned at Lansing Smith Units 1 and 2 an SO2 scrubber project and a baghouse project, but they were removed from the air program. “The Plant Smith scrubber and baghouse projects were originally included in Gulf’s Compliance Program for future consideration; however, it has been determined that the projects are no longer viable compliance options,” Gulf Power said in an April 2014 filing at the PSC. “Environmental compliance strategies for Plant Smith are being evaluated in response to finalization of the MATS rule and anticipation of future land and water regulations.”

Gulf Power is an investor-owned electric utility with all of its common stock owned by Atlanta-based Southern Co. (NYSE: SO). Gulf Power serves more than 436,000 customers in eight counties throughout Northwest Florida.

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.