Southeast Coal Roundup – Southern Company

Due to the perfect storm of stricter environmental regulations, the current state of malaise in the U.S. economy and the drastic reduction in the price of natural gas, we are beginning to see a historic reduction of reliance on coal power by Southeastern utilities.  Across our region, utilities are announcing idling or retirement of their older, uncontrolled coal units and embracing futures with less coal and more renewables in their long term generation planning.  Last week we brought you the story of coal’s decline in the TVA service territory.  In this week’s roundup, we dig into Southern Company’s coal fleet and learn more about how it too is beginning to phase out old, dirty coal plants.

SOUTHERN COMPANY

Southern Company, with its subsidiaries Alabama Power, Georgia Power, Gulf Power and Mississippi Power, has seen one of the more dramatic reductions in coal power over the last few years.  In 2004, Southern Company relied on coal for a staggering 69% of its generation portfolio.  Compare that to the current 36% share that coal has in Southern Company’s portfolio and you have an almost 50% drop in coal generation in under 10 years!  Most of this reduction in coal generation has come from Georgia Power as evidenced in recent Georgia Public Service commission actions (see below for more discussion).

Source: Southern Company 2nd Quarter 2013 Earnings Presentation

 

But Alabama Power Company is still heavily reliant on coal and seems to lag behind many of its Southern neighbors in moving confidently toward clean energy options.  Alabama Power did announce the conversion of two of its coal plants to burn natural gas, but it left the option open to convert these plants back to coal in the future.  Plant Gadsden switched to burn natural gas in 2012 and Plant Gaston is set to convert 4 units to burn natural gas in 2016.  Although repowering to natural gas reduces carbon emissions in the interim, we remain concerned that these coal units could someday be brought back online.

Georgia Power's Plant Branch

As we covered in our Georgia Power IRP blog, the Georgia Public Service Commission recently approved 2,000 MW of coal and oil-fired units to retire by 2016.  Plant Harllee Branch near Milledgeville and Plant Kraft near Savannah will close along with 5 out of the 7 coal-fired units at Plant Yates in Newnan. Last year these plants emitted nearly 4 million tons of carbon dioxide and over 27,000 tons of toxic sulfur dioxide.  When they retire, it will mean a significant improvement in air quality for the state of Georgia and a win for the battle to address climate change.

Gulf Power's Plant Scholz

In Florida, Gulf Power had scaled back operations at its Scholz plant (98 MW) and now plans to retire the plant by early 2015.   This 60 year old coal plant, once Gulf power’s flagship plant, emitted more than 150,00 tons of CO2 annually over the past decade.  As the effects of climate change begin to become more severe, states like Florida will be the hardest hit by sea level rise.  Retiring Scholz and removing this source of carbon dioxide pollution is one more step in the right direction as we strive to reduce national and global carbon pollution.

Mississippi Power currently operates two coal plants, the Daniel Electric Generating Plant (1097 MW) and the Watson Electric Generation Plant (877 MW), both of which currently lack modern air pollution controls required by the upcoming EPA MATS rule.  In 2012, these two plants emitted more than 4 million tons of CO2 into the atmosphere.  MS Power began construction on a $660 million scrubber in 2012 for the Daniel Plant.  Construction of the scrubber is expected to be finished by April 2016.   We are hopeful that MS Power will take a hard look at these decisions to invest significant resources into retrofitting these plants rather than retiring them.

Mississippi Power's Plant Ratcliffe under construction

Mississippi Power should be especially wary of unwise investment decisions considering that the company has been the subject of recent controversy over it’s experimental Kemper carbon capture coal plant facility – Plant Ratcliffe.  The Kemper facility is currently under construction and has already caused Southern Company to absorb $1 billion in losses.  These overruns will ultimately be felt by ratepayers, forcing them to further internalize the external costs of dirty coal generation.

Southern Company has made important strides in Georgia towards cleaner electrical generation sources and away from coal fired power plants.  We are hopeful that we will begin to see this trend in Alabama in the coming years, while we continue to advocate for cleaner energy and more transparent utility decision-making.

Be sure to check back next week for the final installment of the Southeast Coal Roundup series covering Duke Energy and Other Southeast Utilities!

 

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