As part of its environmental compliance strategy, Alabama Power plans to retire the coal-fired Plant Gorgas Units 6 and 7 (200 MW), and also plans to cease using coal at Plant Barry Units 1 and 2 (250 MW) with those units to remain available on a limited basis with natural gas as the fuel source.
Additionally, Alabama Power expects to cease using coal at Plant Barry Unit 3 (225 MW) and begin operating that unit solely on natural gas. These plans are expected to be effective no later than April 2016, said Alabama Power parent Southern Co. (NYSE: SO) in its March 2 annual Form 10-K report.
Southern’s Georgia Power subsidiary expects to request decertification of the coal-fired Plant Mitchell Unit 3 in connection with the triennial integrated resource plan (IRP) to be filed in 2016. Georgia Power plans to continue to operate the unit as needed until the federal Mercury and Air Toxics Standards (MATS) rule becomes effective in April 2015.
Gulf Power intends to retire the coal-fired, 80-MW Plant Scholz by April 2015. Gulf Power recently announced plans to retire its coal-fired generation at Plant Smith Units 1 and 2 (357 MW) by March 31, 2016. The Smith plant will continue to operate and produce electricity with its other generating units on site.
Mississippi Power has agreed to retire, repower with natural gas, or convert to an alternative non-fossil fuel source the units at Plant Sweatt no later than December 2018. Mississippi Power also agreed that it would cease burning coal and other solid fuel at the units at Plant Watson and begin operating those units solely on natural gas no later than April 2015.
More details of developments for coal capacity by subsidiary are:
In July 2013, the Georgia Public Service Commission (PSC) approved Georgia Power’s latest triennial Integrated Resource Plan (2013 IRP) including Georgia Power’s request to decertify 16 coal- and oil-fired units totaling 2,093 MW. Several factors, including the cost to comply with existing and future environmental regulations, recent and forecasted economic conditions, and lower natural gas prices, contributed to the decision to close these units.
Plant Branch Units 3 and 4 (1,016 MW), Plant Yates Units 1 through 5 (579 MW), and Plant McManus Units 1 and 2 (122 MW) will be decertified and retired by April 16, 2015, the compliance date of the MATS rule. The decertification date of Plant Branch Unit 1 (250 MW) was extended from Dec. 31, 2013 as specified in the final order in the 2011 Integrated Resource Plan Update (2011 IRP Update) to coincide with the decertification date of Plant Branch Units 3 and 4.
The decertification and retirement of Plant Kraft Units 1 through 4 (316 MW) were also approved and will be effective by April 16, 2016, based on a one-year extension of the MATS rule compliance date that was approved by the Georgia Environmental Protection Division in September 2013 to allow for necessary transmission system reliability improvements.
In July 2013, the Georgia PSC approved the switch to natural gas as the primary fuel for Plant Yates Units 6 and 7. In September 2013, Plant Branch Unit 2 (319 MW) was retired as approved by the Georgia PSC in the 2011 IRP Update in order to comply with Georgia’s Multi-Pollutant Rule.
In July 2014, the Georgia PSC approved Georgia Power’s request to cancel the proposed coal-to-biomass fuel conversion of Plant Mitchell Unit 3 (155 MW) because it would not be cost effective for customers. Georgia Power expects to request decertification of Plant Mitchell Unit 3 in connection with the triennial Integrated Resource Plan to be filed in 2016. Georgia Power plans to continue to operate the unit as needed until the MATS rule becomes effective in April 2015.
In addition to federal air quality laws, Georgia Power is also subject to the requirements of the 2007 Georgia Multi-Pollutant Rule. The Multi-Pollutant Rule, as amended, is designed to reduce emissions of mercury, SO2, and NOx state-wide by requiring the installation of specified control technologies at certain coal-fired generating units by specific dates between Dec. 31, 2008 and April 16, 2015. A companion rule requires a 95% reduction in SO2 emissions from the controlled units on the same or similar timetable. Through Dec. 31, 2014, the company had installed the required controls on 14 of its coal-fired generating units with two additional projects to be completed before the unit-specific installation deadlines.
In 2012, the Mississippi PSC approved Mississippi Power’s request for a certificate of public convenience and necessity to construct a scrubber on the coal-fired Plant Daniel Units 1 and 2. These units are 50-50 owned by Mississippi Power and Gulf Power. The estimated total cost of the project is approximately $660 million. The Plant Daniel Units 1 and 2 srubbers are scheduled to be placed in service in September and November 2015, respectively. In August 2014, the Chancery Court of Harrison County, Mississippi, dismissed an appeal by the Sierra Club related to the construction of the scrubber on Plant Daniel Units 1 and 2.
In August 2014, Mississippi Power entered into the Sierra Club Settlement Agreement that, among other things, requires the Sierra Club to dismiss or withdraw all pending legal and regulatory challenges of the 582-MW (output), nearly-completed Kemper IGCC coal facility and the scrubber project at Plant Daniel Units 1 and 2. In addition, the Sierra Club agreed to refrain from initiating, intervening in, and/or challenging certain legal and regulatory proceedings for the Kemper IGCC, including, but not limited to, a Mississippi Public Service Commission prudence review, and Plant Daniel for a period of three years from the date of the settlement agreement.
Under the Sierra Club agreement, the utility agreed to retire, repower with natural gas, or convert to an alternative non-fossil fuel source Plant Sweatt Units 1 and 2 (80 MW) no later than December 2018. The company also agreed that it would cease burning coal and other solid fuel at Plant Watson Units 4 and 5 (750 MW) and begin operating those units solely on natural gas no later than April 2015, and cease burning coal and other solid fuel at Plant Greene County Units 1 and 2 (200 MW) and begin operating those units solely on natural gas no later than April 2016.
During 2014, Mississippi Power further extended the scheduled in-service date for the troubled Kemper IGCC project to the first half of 2016. The Kemper IGCC was originally projected to be placed in service in May 2014. Mississippi Power placed the combined cycle and the associated common facilities portion of the Kemper IGCC in service on natural gas in August 2014 and continues to focus on completing the remainder of the Kemper IGCC, including the gasifier and the gas clean-up facilities, for which the in-service date is currently expected to occur in the first half of 2016.
Mississippi Power and Alabama Power own, as tenants in common, Units 1 and 2 (total capacity of 500 MW) at Greene County Steam Plant, which is located in Alabama and operated by Alabama Power. Additionally, Mississippi Power and Gulf Power, own as tenants in common, Units 1 and 2 (total capacity of 1,000 MW) at Plant Daniel, which is located in Mississippi and operated by Mississippi Power. In August 2014, a decision was made to cease coal operations at Greene County Steam Plant and convert to natural gas no later than April 16, 2016. As a result, active construction projects related to these assets were cancelled in September 2014.