Report: 13 Percent of Country's Coal-Fired Power Plants Have Already, or Will Be, Retired

Sep 19, 2014
Originally published on September 19, 2014 3:16 pm

A new report by the federal Government Accountability Office raises concerns about electricity reliability in the United States as coal-fired power plants close to comply with environmental regulations.

The GAO report updates one the office originally published in 2012. That report estimated anywhere from two to 12 percent of the country’s coal-fired power plants would be retired by 2025. But now, the new data suggests the number is actually 13 percent.

Older coal-fired power plants across the country have closed over the past few years—or plan to close next year—because they aren’t economical to run anymore. That’s partly because of federal air regulations, like the Mercury and Air Toxics Standard, which require advanced pollution controls. But there are other economic factors which are making coal more expensive to burn, and many power plants are switching to cheaper natural gas.

According to the GAO’s analysis, the bulk of coal power plant retirements is concentrated in four states: Ohio is retiring 14 percent of its capacity, Pennsylvania 11 percent, Kentucky 7 percent and West Virginia 6 percent.

In 2012, GAO reported that, in response to these regulations and other factors such as low natural gas prices, companies might retire or retrofit some units. GAO reported that these actions may increase electricity prices and, according to some stakeholders, may affect reliability–the ability to meet consumers’ demand—in some regions. In 2012, GAO recommended that DOE, EPA, and FERC develop and document a formal, joint process to monitor industry’s progress responding to these regulations. In June 2014, EPA proposed new regulations to reduce carbon dioxide emissions that will also affect these units.

The GAO report doesn’t recommend any specific actions, just for the Department of Energy, Environmental Protection Agency and the Federal Energy Regulatory Commission to keep an eye on the situation and continue to coordinate actions.

The report was requested by Alaska Republican Sen. Lisa Murkowski, and Republicans were quick to use the results to punctuate criticism of the environmental regulations.

In a speech on the Senate floor earlier this week, Senate Minority Leader Mitch McConnell brought up the report as he championed his proposed legislation to block federal limits on carbon dioxide pollution.

“These shutdowns mean higher electricity prices,” he said. “Sadly, EPA bureaucrats don’t understand or don’t care about how the abundance of coal in Kentucky permits the state to benefit from relatively low energy rates, which makes our businesses more competitive and makes it easier to attract jobs.”

The power plants scheduled to be shut down also tend to be the older and more polluting units. The GAO’s report reported the shutdowns would have a significant health and environmental benefit by reducing emissions of mercury, sulfur dioxide and nitrogen oxide.

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