FirstEnergy blames its business decisions on clean air rules

Contact:
Mark MacLeod, 202-270-0798, mmacleod@edf.org
Sharyn Stein, 202-572-3396, sstein@edf.org

(Washington, DC – February 8, 2012) – Environmental Defense Fund (EDF) criticized FirstEnergy, today, for blaming its decision to close old coal-fired power plants on the Clean Air Act rules that will protect Americans from mercury, acid gases and other toxic air pollution.

FirstEnergy announced today that it will close three old plants in West Virginia. EDF sharply disputed its claim that EPA regulations make the closures necessary.

“These plants are closing because they’re old and inefficient, and because they are facing competition from natural gas — not because of clean air regulations,” said Mark MacLeod of EDF. “The fact is these plants were built when Presidents Roosevelt, Truman and Eisenhower were in office.”

Many utilities are making a business decision to shut down aging and inefficient coal plants – and clean air rules are only the smallest part of the story.

EDF outlines the main reasons for these business decisions on a new fact sheet. They include:

• Age – 59% of America’s coal fired power plants are over 40 years old, with many over 60 years old. In this case, the three plants FirstEnergy will close were built between 1943 (while we were still fighting World War II) and 1960. According to former Senate Majority Leader George Mitchell, “In 1970, the [Clean Air Act] required that new sources meet tight emissions standards. At that time, it was assumed that electrical utility units had an average lifetime of 30 years.”

• Competition from Natural Gas – with increasing natural gas supplies and lower prices, the market is shifting to more efficient combined cycle natural gas generators over old, inefficient coal plants.

• Low utilization –the older units are often small, inefficient, and operated only part-time. From a business perspective, it is not cost effective to keep paying the fixed costs needed to maintain them for limited operation. Energy efficiency and demand response programs are far more efficient ways of meeting these energy needs. In its press release, First Energy itself points out that, “these plants served mostly as peaking facilities, generating, on average, less than 1 percent of the electricity produced by FirstEnergy over the past three years.”

• Health and the Environment – it is not surprising that these old, inefficient power plants are also disproportionately higher emitters of pollutants, and often have not had modern pollution control equipment installed.

First Energy recently announce the retirement of six other coal-fired power plants in Ohio, Pennsylvania and Maryland; it also blamed those closures on EPA regulations. Undercutting that assertion is the fact that the compliance deadline for new EPA rules is 2015, with possible extensions to 2017. FirstEnergy will retire its plants by September 1, 2012.

What’s more, FirstEnergy announced a decision to switch some of those six units from full-time to seasonal operation, and to temporarily mothball others, more than 16 months ago — before EPA even issued its proposal for the new rule.

“Many factors contribute to the new utility investment cycle,” said MacLeod. “Don’t let plant owners use health protections as a scapegoat for retirements.”

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