Coal plant closures and Southern Co.’s ‘big bet’

January 7, 2013 by Ken Ward Jr.

In this Nov. 13, 2012 photograph, workers’ vehicles fill the parking lots at Mississippi Power’s Kemper County energy facility near DeKalb, Miss. The plant, still under construction, is designed to use a soft form of coal called lignite in a gasification process to generate power. (AP Photo/Rogelio V. Solis)

Earlier today, Southern Company’s Georgia Power announced another in a long line of retirements from the nation’s aging fleet of coal-fired power plants:

Georgia Power expects to request approval from the Georgia Public Service Commission (PSC) to decertify and retire 15 coal- and oil-fired generating units totaling 2,061 megawatts (MW), the company announced today.

The request to decertify units 3 and 4 at Plant Branch in Putnam County; units 1-5 at Plant Yates in Coweta County; units 1 and 2 at Plant McManus in Glynn County; and units 1-4 at Plant Kraft in Chatham County, will be included in Georgia Power’s updated Integrated Resource Plan (IRP) that will be filed with the PSC on Jan. 31.

Units 3-4 at Branch, units 1-5 at Yates and units 1-3 at Kraft are coal-fired generating units. Kraft Unit 4 is oil- or natural gas-fired, and McManus units 1-2 are oil-fired.

Georgia Power said:

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.

Additionally, the company will ask for decertification of Boulevard 2 and Boulevard 3 combustion turbine generating units in Savannah upon approval of the IRP, due to the costs to repair and operate the units.

And CEO Paul Powers added:

We recognize the significant impact that these retirements will have on the local communities and we took that into account when making these decisions. These decisions were made after extensive analysis and are necessary in order for us to maintain our commitment to provide the most reliable and affordable electricity to our customers. We are in the midst of a significant transition in our fleet that will result in a more diverse fuel portfolio – including nuclear, 21st century coal, natural gas, renewables and energy efficiency – to ensure we maintain our commitment for generations to come.

The announcement reminded me of a recent Associated Press story, which the AP had dubbed “Southern’s Big Bet“:

In the woods of east Mississippi, a subsidiary of Atlanta-based Southern Co. is pouring billions of dollars into construction of a power plant that burns coal but would emit less carbon dioxide. It’s a response to looming federal limits on carbon emissions as regulators try to curtail global warming.

Each day, as 2,600 construction workers toil away at Plant Ratcliffe in Kemper County, the big bet becomes more expensive. The projected cost is at least $2.8 billion, almost half a billion dollars above original expectations, and some estimates say it will go higher.

Legal challenges brought by the Sierra Club have led regulators to block the company from billing customers for the costs so far, although Southern subsidiary Mississippi Power Co. got closer to that goal with a favorable lower court ruling earlier this month.


In this Nov. 13, 2012 photograph, the top of the crystallizers at the water treatment plant shows a project still in progress at Mississippi Power’s Kemper County energy facility near DeKalb, Miss. The plant, still under construction, is designed to use a soft form of coal called lignite in a gasification process to generate power. The project has come under legal challenge by the Mississippi Sierra Club. The environmental organization says the gasification technology is expensive and unproven. (AP Photo/Rogelio V. Solis)

As the AP story explained, Southern CEO Thomas Fanning stands by the Kemper project:

We are the Saudi Arabia of coal — very high quality stuff. We’ve got to find a way to continue to preserve that important national energy resource to be used for the benefit of our citizens. What we’re doing here in Kemper County, I think, may be a way forward for coal in America. It is that important.

The Sierra Club, in a recent report, argued that the project’s “untested gasification technology, is behind schedule in both engineering and construction, and at less than fifty percent complete, is likely to see further delays and cost overruns.” Louie Miller, State Director of the Mississippi Sierra Club, said:

Sierra Club has fought this dirty, expensive, and unnecessary plant because in the end, Mississippi families and businesses will be forced to shell out, at present, $3.62 Billion dollars and rising, to build a plant that is already hundreds of millions over budget and is not guaranteed to work on day one. And once Mississippians start to pay, they will be paying for 40 years, even with cheaper, cleaner energy sources available. We knew this was a bad deal for Mississippi Power customers from the beginning. The Public Service Commission needs to step in and pull the plug before customers are made to foot the bill for Mississippi Power’s billion-dollar mistake.

4 Responses to “Coal plant closures and Southern Co.’s ‘big bet’”

  1. Dick says:

    Interesting. There were many southern WV mines that supplied Ga Power at one time. But Ga Power started buying the much cheaper western coal and blending it with WV’s more expensive, lower sulfur, higher BTU coal. Over time the blend became more and more in favor of the cheaper western coal. Now even those plants are disappearing.
    Sad for a lot of folks, but that’s progress.

  2. Bo webb says:

    Not only progress, but reality. If our Gov. and people like Joe Manchin cannot see the writing on the wall it is either because they are blind or it is not in their best personal interest to see it. The People are not well served by politicians that place their own well being above their duty.

  3. Ken Ward Jr. says:


    Not sure where you’re getting your information, but SNL Financial looked at the regulatory filings and here’s what they found regarding the Georgia Power facilities that are slated to close:

    Southern Co. subsidiary Georgia Power Co.’s decision to permanently retire units at three older, coal-fired power plants in Georgia will likely be another blow to Central Appalachian coal producers, particularly publicly traded James River Coal Co.

    According to an SNL Energy analysis of coal delivery data for the affected plants, James River units delivered 707,646 tons of coal to the affected plants through the first 10 months of 2012, more than any other coal supplier. The company supplied Georgia Power’s Harllee Branch plant in Putnam County with coal from two of its subsidiaries between January and October 2012, coal delivery data collected by the U.S. Energy Information Administration show.

    Most of that coal was delivered by James River unit Bledsoe Coal Corp. from its Beechfork mine and its No. 1 mine, both in Leslie County, Ky.


  4. Rory McIlmoil says:

    It’s interesting to me that CEO Thomas Fanning states that the coal “we” have is “high quality stuff,” and yet the plant is designed to gasify lignite, the lowest quality of coal there is. Which means a lot of low-quality byproduct “stuff” to dispose of following gasification.

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