First Government-Owned Plant “Off the Island:” Florida’s Coal Plant Reality Show Heats Up

Who will be voted off the island next? Florida’s dwindling cast of coal plant survivors just lost two stalwart characters, government-owned St. Johns River Power Park Units 1 and 2. While this definitely refutes the new administration’s hopes for a coal revival, we are optimistic that JEA is the first of several Florida government agencies to finally give up on wasteful coal plants.

Sure, ratings for this slow-moving reality drama are in the pits, so you might not have noticed coal plants departing the Florida “island” over the past few years. Most of those plants have been privately owned, responding to market forces. If the latest departure is any indication, the government-owned coal plants will be leaving the Florida scene soon.

St Johns River Power Park is one of several coal plants generating less than 50% of the annual maximum. Coal plants were usually expected to operate at a capacity factor of 70-90% when the owners decided to build them.

Until 2015, it looked like St. Johns River Power Park was one of the survivors. Operating 50-60% of the time from 2011 through 2014, it was typical of many coal plants that aren’t running as much as utilities originally intended, but still enough to justify their existence.

Then, in 2015, the plot changed. For the past two years, the two units at St. Johns River were in a slump. Operation dropped to about 40%. And on Friday, JEA and minority owner Florida Power & Light announced that they are taking the two units out of Florida’s power show.

While it was surprising to see St Johns River get “voted off the island” next, the decision could be a foreshadowing of more government-owned coal plants being shut down. Three of the five subpar performers in the coal plant cast are owned by government, including Deerhaven, C.D. McIntosh 3, and Stanton Unit 1. Along with Gulf Power-owned Crist, they have almost always operated between 25-40% of the time since 2012. Performance at the Tampa Electric Big Bend plant began to falter in 2015, following a path very similar to St. Johns River Power Park.

How is it possible that these struggling plants remain on the stage, when JEA has pulled St. Johns River from the show? Are the utility directors too stubborn to give in to reality?

One possibility is that Florida’s government-owned utilities can sometimes be reluctant to make the tough calls, because keeping coal plants online can seem less controversial than embarking on something new. Florida’s government-owned utilities aren’t subject to any required process to consider potentially less expensive alternatives because regulators have relatively little jurisdiction over government-owned utilities. One government-owned utility that has moved to retire a number of its coal plants is the Tennessee Valley Authority, which has opened up its planning process to public involvement, engagement that Florida’s utilities generally resist. The St. Johns River plant retirement proves that financial reality will eventually catch up with government-owned utilities.

Around the country, coal-fired power plants are losing out to renewable energy and natural gas. In the Southeastern states where SACE works, over 23 gigawatts worth of generators have ceased burning coal. Even the President will be hard-pressed to reverse this energy market trend.

While large-scale renewable energy is imminent in Florida thanks to efforts to expand the market for solar, it is not yet competing with coal in the way that wind power is in the Plains states. In Florida, the main competitor is still natural gas. Coal burning is lagging in Florida while natural gas climbs, and coal’s decline will only accelerate as solar energy plays its way to the top.

On the Florida “island,” we already said goodbye to Gulf Power’s panhandle-area Scholz and Lansing Smith plants. Florida Power & Light, the largest utility in the state, recently purchased two small coal-fired plants and retired them, rather than fulfill its contract obligations to buy power from the plant for another decade. FPL is also a co-owner of St. Johns River Power Park and played a role in the decision to retire it.

So who will be next off the island? Here are some of the stragglers to watch:

C.D. McIntosh Unit 3

In 2015, SACE commissioned an economic analysis of C.D. McIntosh Unit 3 (co-owned by Lakeland Electric and Orlando Utilities). The study found that Unit 3 was more costly than energy from gas or solar. However, the management has maintained its position that the plant was needed to hedge against potentially rising gas prices, despite consistent market forecasts to the contrary and ongoing operational challenges at the coal plant.

Stanton Unit 1

Troubled by maintenance problems in 2016, the older of the two coal-fired generators in Orlando has really been struggling since at least 2012, when its usage dropped below 30%. Sentinel reporter Kevin Spear aptly summed up its situation: “[Orlando Utilities Commission] faces an enormously costly version of a question that a car owner may confront: whether to get rid of a middle-age vehicle because of upkeep and fuel costs.” Orlando also has ambitious goals to be a clean, green city. Will it leave this plant behind?

Deerhaven

Given its performance, it’s time for Gainesville Regional Utility managers to look hard at Deerhaven. The plant’s air pollution controls broke in late 2016, and the utility is assessing what it will cost to fix or replace them. It is also in negotiations to buy a biomass plant it currently buys power from at a high fixed cost, providing a potential alternative to coal.

Crist

The four generators at Gulf Power’s last operational coal plant in Florida have been running well below the levels they were designed for. In fact, two of them are already slated to retire in 2024. Gulf Power’s March 2017 rate case settlement requires special proceedings before costs of any further environmental upgrades can be passed on to customers. Upgrades such as a cooling tower, which can cost hundreds of millions of dollars, may be necessary to mitigate the plant’s harm to local water bodies.

Big Bend

The Big Bend power station has been a workhorse for Tampa Electric until recently, when its usage declined almost parallel to the retiring St. John’s plant. On top of that, Tampa Electric may be in for a makeover, as its new Canadian parent company Emera brings a strong clean energy track record in Nova Scotia to the Florida game.

No matter what a certain former reality show star and producer thinks about coal plants, the act is getting old, and these aging plants have to give way to new, clean performers like solar energy. If you pay your bill to one of these coal-dependent utilities, find out who makes decisions there and tell them it’s time to vote coal off the island. Contact the author if you’d like help contacting your utility: amelia at cleanenergy dot org.

Research Director John D. Wilson contributed to this post.

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2 Comments

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You didn’t mention that part of the reason some of these plants hit low usage was because the utilities also had natural gas units, and during the last 8 years coal price has shot up. So any business would use the cheaper product. You also didn’t look into any information about possibilities of upgrading some of the coal units, which would make them more efficient. There are also issues about how some plants have multiple coal units, and still heavily use the units you didnt report on. This seems less like a report on the current situation, and more like an opinion piece about coal.


Comment by Taylor on March 23, 2017 2:51 pm


Hi Taylor, thanks for adding that context. Regarding plant efficiency upgrades, retiring coal-fired generators can be more cost-effective and should be considered before doing an upgrade. To your point about multiple coal units at certain plants, there are indeed some cases where we identify one generator at a plant as more of a “straggler” than other generator units at that same plant. For example, Stanton 1′s performance is well below Stanton 2′s, so Stanton 1 was featured while Stanton 2 is lumped in with the “Other Coal-Fired Generators,” the grey line in the capacity factor chart. Utilities routinely retire one or more units at a plant while leaving others operating.

SACE is a 501(c)(3) advocacy organization; for more on our positions on clean energy issues, please see http://www.cleanenergy.org.


Comment by Amelia Shenstone on March 23, 2017 3:20 pm


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