Alabama Power cutting the number of coal-fired units from 23 down to 10

Alabama Power said in a Nov. 25 story posted to its website that the coal-fired Plant Gorgas Units 6-7 in Walker County, and Plant Barry Unit 3 in Mobile County, have produced their last megawatt of power.

All three units served Alabama Power customers well for decades. As recently as early winter 2015, Gorgas 6 and 7 played an important role in meeting customer demand during frigid weather. But increasing federal environmental regulations finally spelled the end for these units, which the company has now officially closed permanently, said the story.

“From a reliability standpoint, Gorgas 6 and 7 were top of the line,” said Billy McKay, an operations team leader at Gorgas. “They were really great units.”

“Frankly, as hard as it is, when considering options for these three units, closing them was the most cost-effective choice for our company and for our customers,” said Jim Heilbron, Alabama Power senior vice president and senior production officer. Closing the units also helped the company end a longstanding legal dispute with the federal government related to environmental regulations.

Meanwhile, the company is spending about $1 billion at other units around Alabama Power’s system to comply with the latest environmental regulations. This is on top of about $3 billion the company has spent over the past dozen years complying with previous environmental mandates.

The current, ongoing expenditures include adding additional controls at the three remaining coal units at Gorgas. The company is completing work on a new baghouse for Gorgas Units 8, 9 and 10, at a cost of about $375 million. The baghouse is designed to remove additional particulate matter as well as tiny amounts of mercury from the units’ emissions. Another baghouse, for Unit 5 at Plant Gaston in Shelby County, is also nearing completion.

At Plant Barry, the tightening regulations are also forcing the company to cease using coal at Units 1 and 2. Instead, the units will be available going forward, on a limited basis, using natural gas.

Natural gas also was the most cost-effective choice for meeting environmental regulations at Plant Gadsden. That plant ceased using coal earlier this year.

The company also is adding natural gas capabilities to four coal units at Plant Gaston, and to both coal units at Greene County; all six units are expected to stop using coal next year. In all, the company said it is reducing the number of coal units from 23 to 10 because of federal environmental mandates.

“These regulations are forcing us to make costly changes in how we generate electricity for our customers,” said Matt Bowden, Alabama Power’s vice president of Environmental Affairs. “And there are more regulations coming.”

In its Nov. 5 quarterly Form 10-Q filing with the SEC, parent Southern Co. (NYSE: SO) said about Alabama Power coal retirements: “In April 2015, as part of its environmental compliance strategy, Alabama Power retired Plant Gorgas Units 6 and 7. These units represented 200 MWs of Alabama Power’s approximately 12,200 MWs of generating capacity. Additionally, in April 2015, Alabama Power ceased using coal at Plant Barry Units 1 and 2 (250 MWs), but such units will remain available on a limited basis with natural gas as the fuel source. No later than April 2016, Alabama Power expects to cease using coal at Plant Greene County Units 1 and 2 (300 MWs) and begin operating those units solely on natural gas. On August 24, 2015, the U.S. District Court for the Northern District of Alabama entered an order approving the joint stipulation in the New Source Review (NSR) action. In accordance with the joint stipulation, Alabama Power retired Plant Barry Unit 3 (225 MWs) and it is no longer available for generation.”

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.