Alabama Power changes driven by federal regulations
By Matt Bowden and Jim Heilbron
As a power company, we know the difference between generating heat and light.
A great deal of media heat greeted our decision to convert or close some generation facilities to meet federal Environmental Protection Agency (EPA) mandates. Speculation about our motivation from environmental activist groups quickly followed.
It’s time to shed some light on the subject.
The company will retire two coal-fired units at Plant Gorgas in Walker County and convert coal units at Plant Greene County and Plant Barry in Mobile County to natural gas by 2016.
We do not make these decisions lightly. Our hands were forced by rules tied to federal environmental regulations. These EPA mandates restrict our ability to provide our 1.4 million customers with energy in the most cost-effective manner.
No single regulation is solely to blame. We acted to meet looming deadlines on mercury emissions and in anticipation of proposed greenhouse gas restrictions, which would cap the release of carbon dioxide. This is in addition to rules on coal combustion byproducts, water discharges, fine particles, ozone and sulfur dioxide. The sheer scope of EPA’s regulatory agenda on coal is unprecedented.
As officers of Alabama Power, we have the responsibility to provide our customers with the reliable energy they need while ensuring we comply with all environmental regulations. We take these obligations very seriously.
Our company has invested billions of dollars to meet environmental standards. We’ve already installed technology to reduce nitrogen oxides, sulfur dioxide and mercury emissions by up to 80 percent. We’re installing additional controls to further reduce mercury.
We’ve done it all while keeping plants open and our price below the national average. But clearly, a tipping point has been reached.
Congress never intended for energy policy to be set by a single federal agency. This authority rightly resides in the hands of elected officials who understand local economic conditions. As history has shown, federal overreach often results in unintended consequences.
For instance, our ability to tap into a diverse mix of fuels – natural gas, nuclear, coal, hydro and other renewables – helps ensure we are generating electricity at the lowest cost for our customers. Taking away any one fuel source – especially one of the cheapest and most abundant – exposes customers to marketplace volatility.
Every one of the units affected by our announcement was needed last winter to meet cold-weather energy demands. Having them available for peak periods means we don’t have to buy more expensive energy from other regions.
We must also be mindful that nearly one in five of our customers live below the federal poverty line. Many are on fixed incomes. They deserve reliable and affordable energy, too.
More than just customers are affected. Our power facilities, many located in rural areas, are vital to the communities they serve. Having to eliminate 60 positions at our plant in Greene County, in the heart of Alabama’s Black Belt, may not mean much to Washington regulators, but it means a lot to us.
Alabama has just begun to climb out of the national recession. Workforce development is picking up steam. We need to create jobs – not cap growth.
Washington may impose restrictions on energy production. But it does not take the phone calls from customers wondering why their bills have risen or why there are more outages during peak periods.
We do. And we listen. That is why Alabama Power is speaking out – for our customers and our state.
Matt Bowden is vice president of Environmental Affairs at Alabama Power.
Jim Heilbron is senior vice president and senior production officer at Alabama Power.