FOR IMMEDIATE RELEASE
Thursday, April 11, 2013
Seth Gunning, Sierra Club, 404-434-9745
John Suttles, SELC, 919-967-1450
Lisa Hamilton, Institute for Energy Economics and Financial Analysis, (212) 729-9391
Katherine Helms Cummings, FACE, 478-232-8010
Amelia Shenstone, Southern Alliance for Clean Energy, 339-223-0536
End of the Road for Plant Washington
Plants Future Uncertain as Critical Deadline Approaches
ATLANTA, GA – It’s already too late for developers to gamble further on the risky proposal for a middle-Georgia coal-fired power plant, according to consumer and environmental advocates. Developers of Plant Washington are scrambling to meet a looming April 13th construction deadline in an attempt to qualify for exemption from new EPA Clean Air Act pollution limits.
Plant Washington’s developer, Power4Georgians, did not meet the first of two criteria to be exempted from new Clean Air Act standard for greenhouse gas (GHG) emissions – standards the plant cannot achieve – because it lacked a final and complete permit when the greenhouse gas rule was published. If Power4Georgians does not commence construction by Saturday, it will not meet the second criterion either. According to environmental groups, there is also significant uncertainty about the legality of EPA’s proposed exemption to the new standard.
John Suttles, an attorney with the Southern Environmental Law Center, pointed to EPA’s May 17, 2012 filing with the D.C. Court of Appeals regarding Power4Georgians’ claim to have had a final permit before the GHG standard was published. The EPA said “this assertion is incorrect, inasmuch as state administrative challenges to the [Power4Georgians] permit remain pending.”
“If EPA accepts Power4Georgians’ statement that they had a final permit, they would be taking a position inconsistent with what they told the D.C. court of appeals,” Suttles said. “Furthermore, we would strongly consider contesting EPA’s use of a ‘transitional source’ designation to exempt certain power producers from Clean Air Act standards. The ‘transitional source’ exemption diverges from past implementation of the Act.”
Even if EPA extends the April 13 deadline or revises the greenhouse gas rule entirely, the uncertainty about what standards the plant will have to meet and the possibility of another protracted legal battle brought by local resident and state environmental groups make the future dim for Plant Washington.
“We suspect that investment in Plant Washington is incredibly unappealing to would-be financiers given the increasing uncertainty of greenhouse gas regulations and existing financial risk of constructing a merchant coal plant in today’s market,” said Amelia Shenstone, an organizer with the Southern Alliance for Clean Energy. “Continuing to develop Plant Washington is quite simply throwing good money after bad.”
Power4Georgians hopes to construct the plant and sell its power to utilities. However, it will only recoup investments if the plant produces power cheap enough for utilities to buy, which seems increasingly unlikely at a time of record low natural gas prices. Katherine Helms Cummings, a Washington County resident and director of the local Fall-Line Alliance for a Clean Environment, wants to avoid financial hazards for Washington County taxpayers, who will be at risk if the Industrial Development Authority issues bonds on behalf of Power4Georgians.
“This issue with the greenhouse gas standard is just another in a long line of questionable financial dealings that make Plant Washington a bad idea,” Cummings said. “Power4Georgians never developed a financial pro-forma for the project, it chose a developer who has never built a coal plant in a no-bid process, and its cost estimates haven’t been revised since 2008 despite similar plants seeing costs triple. All of the utility co-ops that originally financed the projects withdrew their funding because of the uncertain cost, despite their earlier plans to own and operate the plant.
“With or without greenhouse gas regulations, Plant Washington is a bad investment,” said Lisa Hamilton, who studies power plant projects across the U.S. on behalf of the Institute for Energy Economics and Financial Analysis. “New coal-fired power plants simply cannot compete. Right now we’re seeing hundreds of communities throughout the Midwest struggling to survive the millions of dollars of projected losses they will sustain through 2024 as a result of their nearly $5 billion investment in the Prairie State coal-fired power plant in Illinois. After operating for less than a year, several communities have already tried to get out of their commitments to purchase power from the facility. Now is a good time for Power4Georgians to drop Plant Washington for good and avoid the same mistakes.”
“It’s time to cancel Plant Washington before we dig this hole any deeper,” concluded Cummings.