Coal-dependent seminole electric cooperative seeks options as epa crackdown looms find a gas station close to me

######

The U.S. Environmental Protection Agency, cracking down on carbon emissions, is targeting coal-fueled power plants in a federal initiative called the Clean Power Plan. In Florida, that could force the early closing of most of the remaining coal plants in the state. Seminole Electric provides wholesale electric power to its nine-member distribution electric cooperatives. They, in turn, deliver electricity to their mostly rural and often lower-income customers.

More than half of that power is generated by the Seminole Electric’s two 650-megawatt, coal-fired generating units known as the Seminole Generating Station. Based in Putnam County, just north of Palatka, the plant employs about 300 people and uses nearly 10,000 tons of coal a day, delivered by CSX trains, to generate electricity.

That coal plant’s future is now in jeopardy should a final EPA rule require its early closing. Seminole Electric still owes money on that plant. If the plant closes, the co-op would face the additional expense of paying for electricity to replace that lost power. That may require building a new natural gas plant. Most of those extra costs would land on the co-op’s customers in the form of significantly higher electricity rates. In late June, the U.S. Supreme Court found that the EPA acted unreasonably in setting limits on toxic emissions from power plants without consideration for the financial impact on the industry.

It is a big challenge. I think realistically, when there’s talk about taking that many large power plants out of this state’s resource mix in such a short time, natural gas plants appear to be the only viable option to replace that lost power generation.

We are looking at our options. It will depend on timing and whether there are available resources that other parties have to sell. So, timing is a big challenge. It is not clear to me that there will be a lot of excess generation in Florida in the early-to-mid 2020s. It’s up to us to make sure we can position ourselves as to whether we purchase electricity from others, build our own plant or opt for some combination of the two.

The lack of diversity of fuel sources to generate electricity is a big concern. In round numbers, Florida is nearly 65 percent dependent on natural gas. Our calculation, based on the EPA’s plan, puts that closer to 85 percent by the mid 2020s.

Because we do not yet know what we are dealing with, it is very difficult to estimate the true cost. We’ve looked at some independent studies based on the proposed Clean Power Plan that suggest rate increases somewhere between 13 and 20 percent. The chairman of the Florida Public Service Commission recently testified before Congress and cited ranges of 25 to 50 percent. It’s hard to know right now.

The court’s ruling may influence the timing of the Clean Power Plan by providing a perspective on the need to "stay" the regulation pending a full hearing of the legal challenges. In this latest ruling, by the time that specific matter on toxic pollutants had been litigated, most utilities affected by the rule had already made significant, long-term decisions and investments that could not be changed despite the Supreme Court ruling.

The Clean Power Plan will also be litigated. As with this related court ruling, however, long-term decisions will have to be made regarding the Clean Power Plan requirements in advance of knowing the final outcome of any litigation. Rules like this are very broad and complex. And they ultimately have real impacts for real people at the end of the line.