Will EPD cut Plant Washington slack – again – or finally cut it loose?

This blog was written by Amelia Shenstone, former Regional Advocacy Director with the Southern Alliance for Clean Energy.

Guest Blog | June 15, 2016 | Coal, Energy Policy

The saga of one of the last two proposed new conventional coal-fired power plants in the nation continued to approach its inevitable end this spring, as the air quality permit’s deadline to commence construction passed with no shovels in sight, and plant developer Power4Georgians (P4G) requested yet another extension.

If the state Environmental Protection Division (EPD) denies the extension, it could be the end of a long, long road that wasn’t wise to go down in the first place. And it would prevent any further waste of scarce agency resources.

Consumer and environmental groups have contended for years that Plant Washington was never financially viable, and would severely impact air, water, and climate. In a May 31 letter sent by the Southern Environmental Law Center on behalf of SACE and allies, we urged EPD to deny the request for an extra 18 months to start construction. Without the extension, the plant’s air emission permit would expire. It could not be built without starting the permitting process over from scratch.

The permit was initially issued in 2010 and a challenge from environmental groups settled in 2012. When an air quality permit is issued to a developer, it includes a deadline for construction to commence, in order to ensure that projects are built to up-to-date specifications, not based on “stale” permits. P4G requested a first extension in 2013. It has been more than 6 years since the permit was issued. And now, P4G wants more time (download the current request here).

The letter, which outlines reasons to deny the extension, is worth quoting at length:

P4G cites regulatory uncertainty stemming from Environmental Protection Agency’s (“EPA”) Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units (“New Source Rule”) as purported justification for its second extension request. But P4G omits mention of the many other, more significant barriers to its quixotic proposal, including lack of available financing, lack of customers to buy the expensive power the plant would generate, lack of load growth, and growing competition from cheaper sources of supply, especially natural gas. Granting P4G more time will not remedy these issues.

Moreover, to the extent that regulatory uncertainty does exist, P4G has actively participated in perpetuating that uncertainty.  EPA’s New Source Rule was first proposed in April 2012. EPA issued a re-proposal in January 2014, and a final version of that rule became publicly available on August 3, 2015. Therefore, since April 2012, P4G has been on notice that its status as either an existing or new source for purposes of the rule was in question. As a result, P4G has been on notice as to the mechanism available for resolving that uncertainty: an applicability determination from EPA or EPD. In fact, P4G formally requested an applicability determination from EPD in April 2013, but for unexplained reasons, withdrew that request in November 2013, before EPA’s issuance of the re-proposal. Since that time, P4G has been free to re-initiate an applicability determination request to either EPD or EPA but has failed to do so. Indeed, the final rule issued in August of last year expressly urges P4G to seek an applicability determination to clear up the issue of its regulatory status. But rather than do that, P4G now burdens EPD with a second extension request. For these reasons, regulatory uncertainty is hardly a basis for granting the request; instead, P4G’s unclean hands give EPD good cause to deny it.

In addition, P4G fails to meet the standard for securing a second extension request, is not in compliance with its current air and wastewater permits, and is not even a valid corporate entity with legal standing to make the request. As such, EPD has ample grounds for denying the second extension request, and should avoid devoting limited agency resources to anything other than a flat denial.

The full letter can be downloaded here.

Plant Washington was conceived in 2007 under the leadership of now-indicted, former Cobb EMC CEO Dwight Brown, and a no-bid developer contract was awarded to his business partner C. Dean Alford, who had never developed a coal plant before. It was backed by a consortium of utility co-ops, all of which have either ceased funding it or cut ties entirely. Their departure left only one known private investor, whose publicly stated contribution is only $2 million toward the estimated $2.1 billion price tag.

A report showed in 2010 that actual construction is likely to cost far more than P4G’s estimate, closer to $4 billion. According to the consumer group Georgia Watch, the additional cost to ratepayers would average $258 a year.

It’s no surprise that funding is hard to come by for this proposal. To date, no demonstration of need for the power from the plant has been produced. The only other proposals for new conventional coal plants (i.e. those without carbon capture and sequestration) are either canceled or tied up in court (this one, the Holcomb expansion in Kansas, is giving Plant Washington a run for its money to be the last new coal plant proposal standing in the country). Plant Washington’s struggles to fit into a new world that more carefully protects its living environment.

We are at the end of the era of building new coal plants in this country. EPD would be ill advised to indulge P4G’s determination to squeeze this last one under the wire.

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