American Electric Power (AEP), the nation’s biggest consumer of coal, announced that it would shut its coal-burning boilers at the Big Sandy electric power plant near Louisa, KY, a 1,100-megawatt facility that since the early 1960s has been burning coal that was mined locally.
Big Sandy this year became a symbol of the plight of the coal industry nationwide. Strict new environmental regulations are forcing large utilities to spend billions of dollars to retrofit old coal-burning plants or shut them down, replacing them in most cases with equipment that uses cleaner-burning natural gas, The New York Times reported.
AEP, which is based in Ohio, has repeatedly changed its mind over what to do with Big Sandy, a big employer in eastern Kentucky, both at the 120-employee plant itself and in the Appalachian-area coal mines that feed it 2.5 million tons of coal each year.
In May, the power company withdrew a plan to spend $1 billion to retrofit Big Sandy so that it could continue to operate. But that would have required a 31 percent increase in electricity rates for eastern Kentucky residents.
On Dec. 19, AEP. announced that it would close both of the coal-burning furnaces at Big Sandy in 2015, but left open the possibility that one of the units would be retrofitted to use natural gas. Area residents, if the Kentucky Public Service Commission approves the plan, would see an 8 percent increase in their electricity rates — to replace Big Sandy’s production with electricity from West Virginia — much less than the earlier plan.
A total of 55 plants, including Big Sandy, have closed or have announced plans to shut down, according to a count by the Sierra Club. That will leave 395 coal-burning plants in the United States, compared with 522 in 2010, according to the Sierra Club.
Dynergy of Houston announced that its Danskammer coal-burning power plant near Newburgh, N.Y., which was damaged during Hurricane Sandy, would also close permanently. In November, Patriot Coal, based in St. Louis, which filed for bankruptcy this year, announced it would be shutting down its Bluegrass Mine Complex near Henderson, Ky., one of dozens of mines that are reducing production or closing operations as electric utilities shift at a record rate from coal to natural gas.
Nationwide, coal production dropped this year by an estimated 7 percent even as exports grew to Asia and Europe, according to the Energy Department.
Politically, this has been a disappointing year for the coal industry as well. Industry executives contributed heavily to Mitt Romney’s presidential campaign, while also sending large donations to important Congressional races, like Senate contests in Ohio, Virginia and Montana, in which their preferred candidates lost.
The Environmental Protection Agency predicted late last year when it adopted its new air pollution rules — which strictly curb emissions of mercury and other toxins from coal-burning plants, forcing them to upgrade or close by 2015 — that it would prevent 11,000 premature deaths each year as well as 130,000 asthma attacks. The rule has been decades in the making; it is based on changes in the Clean Air Act adopted in 1990 but fought by the industry ever since. The closing of these coal-burning plants will also reduce the emission of carbon dioxide, which is regarded as a leading contributor to global warming. So the announcement by AEP that Big Sandy is shutting down it coal-burning boilers was celebrated by environmentalists.