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Mercury emissions rules will affect power costs

WHEELING, W.Va. — The Obama administration’s mercury emissions standards could force 60 gigawatts of coal-fired electricity offline by the year 2020, which leaves American Electric Power, FirstEnergy and grid operators scrambling to compensate for the lost power.

One gigawatt can power as many as 1 million homes, according to FirstEnergy spokeswoman Stephanie Walton. If 60 gigawatts of electricity are retired by 2020, this would leave companies searching for ways to deliver power to as many as 60 million households.

Robert Murray, president, founder and CEO of Murray Energy, said Obama’s “political power grab of America’s power grid” will force Ohio residents to pay $852 more for electricity annually by 2020, with those in West Virginia paying $750 more per year. Murray spokesman Gary Broadbent said the Environmental Protection Agency’s Mercury and Air Toxics Standards are a “train wreck of job-killing, anti-coal regulations.”

However, EPA officials emphasize the health benefits of their Mercury and Air Toxics Standards. They say the measure will ultimately prevent 656 “premature deaths” in Ohio and West Virginia, while promoting more than $5 billion worth of “health benefits” for the two states in 2016.

AEP is already preparing to shutter the 630-megawatt coal-fired Kammer Plant in Marshall County this year, while the firm stands to close a total of 11 plants during the next five years to comply with both federal mercury and carbon dioxide emissions standards. Company spokeswoman Carmen Prati-Miller said the firm is investing $1 billion for transmission system improvements that will help compensate for the loss of wattage. However, spokeswoman Melissa McHenry admits this likely will not suffice.

“There is significant concern about the impact on the retiring that much generation that quickly,” she said.

“Five years isn’t enough time to properly evaluate the reliability impact of those closures on the electric grid and to build the new power plants, transmission lines and natural gas pipelines critical to keeping the lights on.”

McHenry also said those AEP plants remaining in operation, such as the Mitchell and Cardinal plants, have already received “more than $10 billion worth of emission controls that were installed to meet other EPA requirements.”

Power Loss

The U.S. Energy Information Administration, an arm of the Department of Energy, projects 60 gigawatts of coal-fired capacity will retire by 2020. This number includes some plants that have already closed, as 10.2 gigawatts of coal power shut down in 2012, the Obama administration indicates.

However, McHenry said implementation of the EPA rules will actually take 73 gigawatts of coal-fired power off the market by 2020. She said this would be enough electricity to power all the homes in New York, Ohio and Virginia combined.

“Climate change is a global issue, and some states should not bear a disproportionate share of the cost of U.S. action to cut emissions,” McHenry said.

FirstEnergy operates the huge W.H. Sammis Plant in Jefferson County, while providing electricity to Brooke, Hancock, Wetzel and Tyler counties via its Mon Power subsidiary. The company also still runs the R.E. Burger Plant in Shadyside on a reserve basis.

“FirstEnergy believes the premature retirement of baseload generating plants – those that are available to produce electricity around-the-clock, such as coal and nuclear – can impact electrical grid reliability and affordability,” Walton said. “We believe a diverse generating fleet is critical to ensure reliable and affordable electricity, and that it is essential that baseload generation remain a feasible and cost-effective source of power to meet current and future energy needs.”

McHenry also said “very low natural gas prices” are contributing to a loss of coal power. Officials with Moundsville Power are working to place their 549-megawatt natural gas power generator online as soon as possible. This firm plans to upload its power to the PJM Interconnection grid so that it can be used in multiple markets, depending on demand.

“Cheap natural gas is also impacting coal-fired power plants – not just environmental regulations,” added Eric Bowen, economist for the Bureau of Business and Economic Research at West Virginia University.

Environmentalist Point Of View

According to the EPA, the new emissions standards will protect Ohio and West Virginia residents from not only mercury, but also arsenic, chromium, nickel and acid gases. The agency also estimates these regulations will help prevent 560 premature deaths in Ohio, as well as 96 in the Mountain State. There will be $4.6 billion worth of health benefits created in the Buckeye State in 2016, with another $790 million coming to West Virginia, the EPA states.

“Mercury, arsenic, and acid gases from coal-fired power plants endanger our children and are dangerous to our communities – the rule is expected to prevent up to 11,000 premature deaths and more than 100,000 cases of asthma each year,” said Mary Anne Hitt, Beyond Coal director for the Sierra Club. “EPA estimated that the standards would give the public $90 billion worth of health benefits in 2016 – $9 in benefits for every dollar spent by industry.”

Officials with the EPA said they reviewed more than 900,000 public comments before establishing the final mercury regulations. The agency believes humans primary exposure to mercury comes from eating contaminated fish. EPA says exposure to excessive mercury can damage the brains of children, impairing their ability to think and learn.

“The fact is, coal plants across the nation have been working toward complying with this common-sense standard since it was issued in 2012, resulting in cleaner air for millions of Americans. Turning back the clock on that progress makes no sense, and would deal a huge blow to public health,” Hitt added.

Economic Impact

Bowen said including the 630 megawatts from Kammer, 1,700 megawatts of power are scheduled to retire in West Virginia by the end of this year. He said this will likely result in the loss of 400 energy sector jobs in the state.

Via its numerous subsidiaries across Ohio, West Virginia, Illinois, Kentucky, Pennsylvania and Utah, Murray Energy directly employs about 7,400 workers, while the company produced about $3.6 billion worth of coal in 2014. In the Ohio Valley, Murray owns mines in Beallsville, Alledonia, Benwood and Cameron.

Broadbent said these EPA regulations will eliminate “thousands” of jobs related to the coal industry during the next few years.

“Indeed, to date, 411 coal-fired power plant units have been designated for closure, through 2016 alone, representing 101,000 megawatts of the lowest cost electricity in America,” Broadbent added. “This represents the loss of the lowest cost electricity in America, which is especially harmful because low cost electricity is a staple of life to all Americans, particularly those who are poor or on fixed incomes, and manufacturers who produce a product which must compete in the global market place.”

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