Black Hills Corp. will shutter two coal-fired power stations in Wyoming in the next 19 months, which could affect as many as 13 employees.
On March 21, 2014, the company will close the 34.5-megawatt Osage plant and the 22-megawatt Neil Simpson 1 unit, said Greg Hager, vice president and general manager of the Gillette power complex in which Neil Simpson 1 is located. The Neil Simpson Complex contains a coal mine and six power stations, many of which are owned partly or wholly by Black Hills Corp. Some employees work at more than one unit, but Hager estimated 12 or 13 people are directly associated with Neil Simpson 1, which opened in 1969.
The Osage plant, which was built in the late 1940s, has been idle since October 2010, Hager said.
“It’s currently on economic suspension,” he said. “We maintain it in case we need to start it. But officially there is no one working there.”
Company executives decided to close the Wyoming plants after evaluating two recently passed U.S. Environmental Protection Agency rules — the “Industrial Boiler MACT” rule for plants that produce 25 megawatts or less and the “Utility MACT” for plants that produce more than 25 megawatts — and deciding it was not economical to retrofit them with emissions controls.
Black Hills Corp. power stations in Colorado and near company headquarters in Rapid City, S.D., are also being closed.
Rapid City power station employees who have more seniority than Gillette employees – employees are represented by the International Brotherhood of Electrical Workers – may choose to move to Gillette by Oct. 1, Hager said.
“There may be some people coming to the Neil Simpson complex from Rapid, which may displace some people here,” Hager said. “It could be as many as seven, more than likely less because some people would choose not to move.”
Any power generation lost by the closure of the Wyoming plants will be replaced by a proposed $237 million, 132-megawatt natural gas-fired station in Cheyenne, the company said.
Building a coal plant may not be feasible in today’s regulatory environment, in which coal emissions are being limited and legal challenges by environmental groups take time to resolve.
“Why wouldn’t you build a new coal plant in Cheyenne?” Hager said. “Just getting approval in building a coal plant today would probably be a show stopper. You’re not going to get it approved, or the requirements to meet the new regulations and any intervention extension would be costly to your customers.”
Marion Loomis is the executive director of the Wyoming Mining Association. He doesn’t believe closing a coal-fired power station in the heart of Wyoming’s Powder River Basin will have much of an impact on the coal industry, especially since the nearby Dry Fork Station, which opened last summer, is larger and more modern.
“We will, however, see many older plants shut down in the next 10 years in the country,” he said in an email. “We will also see some convert to [natural] gas and we will see new gas plants erected.”
Loomis questioned whether it’s smart to rely heavily on natural gas for power.
“If we shut down a large percentage of the old plants, our ability to have a reliable electric supply will be in danger,” he said.
Jeremy Nichols, the climate and energy program director of Santa Fe, N.M.-based WildEarth Guardians, was happy that more coal-fire power plants are being closed. His group has been fighting against the carbon emissions from coal combustion.
“This is part of a larger trend we’re seeing, where companies are seeing the liabilities with coal,” he said. “Kudos to Black Hills for seeing the writing on the wall. The economics of coal aren’t the wisest in the long run.”
In February, WildEarth Guardians sent a letter to the EPA about all of the units and the coal mine in the Neil Simpson 1 Complex in Gillette. The group complained about what it perceived to be lax state oversight under the Clean Air Act. The group has not heard back from the EPA, Nichols said.