Black Hills Corp. shuttered a unit at a coal-fired power plant outside Gillette last week, the latest in a series of moves by the Rapid City-based utility aimed at revamping its aging coal fleet.
The retirement of the 22-megawatt Neil Simpson 1, one of five coal units at the Wyodak Neil Simpson complex, had long been planned. All eight of the unit’s full-time employees were transferred elsewhere within the company. And much of the facility’s power will be replaced by a new 132-megawatt natural gas plant, which is scheduled to open in Cheyenne later this year.
Still, the closure underlined a recent trend that has seen utilities nationwide move away from older coal-fired facilities in favor of new natural gas powered plants. Black Hills will decommission three coal units in 2014 -- two in Wyoming and one in Colorado. A third coal unit in South Dakota will be decommissioned next year.
Black Hills officials said the closures were a response to recent Environmental Protection Agency regulations aimed at reducing harmful emissions from industrial boilers and curbing mercury pollution.
“Replacing Black Hills Power’s three oldest coal-fired power plants is less expensive for customers than retrofitting the plants to comply with the new EPA standards,” said Sharon Fain, a utility spokeswoman. “Although these plants were once built with state-of-the-art technology, they are now 42-62 years old. It would be very expensive to update these plants to meet new EPA requirements, and newer technology used on new plants can now better reduce emissions.”
The rash of retirements was hailed by environmentalists, who said it was evidence utilities were bowing to the reality that coal-generated electricity is dirty and inefficient. But they were decried by coal backers who argued it was a sign of the Obama administration’s “war on coal.”
“The government has picked winner and losers in the EPA process and picked coal as a loser. Our power is going to cost more, and it is all because of government policy,” said Rep. Cynthia Lummis, a Wyoming Republican. “This really hits everyday Americans directly in the pocketbook.”
Yet such regulations merely transfer the costs of pollution from society to industry, said Jeremy Nichols, climate and energy program director at Widearth Guardians, an environmental group. He cited mercury pollution as an example, noting that mercury pollution can impair the development of fetuses, among other health risks.
In closing a unit like Neil Simpson 1, Black Hills is acknowledging that the cost of that pollution is too high and is pursuing a cleaner alternative, he said.
“Energy is about trade-offs, without a doubt. I think mercury pollution is not an acceptable option,” Nichols said. “The last thing we want is a pregnant mother to be exposed to mercury. That is not a cost I think society wants to shoulder today.”
Neil Simpson I was closed March 19, Black Hills officials said. Decommissioning of the unit will begin in the fourth quarter of 2014 and is scheduled to finish by the second quarter of 2015. The utility also has plans to begin decommissioning the Osage plant this year. The 34.5-megawatt coal fired unit in northeastern Wyoming has been idle since 2010.
Two coal units at W.N. Clark plant in Canon City, Colo., will begin decommissioning this year, while the 25-megawatt coal unit at the Ben French power plant in Rapid City will be decommissioned next year.
All the plants have two things in common: They are old and relatively small. None was installed after 1969 and none produces more than 40 megawatts of power. Neil Simpson II, by comparison, was commissioned in 1995 and generates 90 megawatts of electricity.
The Cheyenne Prairie Generating Station is scheduled to go online Oct. 1. The $220 million facility is on schedule and on budget, Fain said. The costs of the facility will be borne by Cheyenne Light, Fuel and Power customers, she said. The utility is a subsidiary of Black Hills Corp.