Think the energy crisis of the 1970s is ancient history? Think again.
In 1978, concerned that madcap mullahs in the Middle East would choke off the world’s supply of natural gas, Congress passed the Power Plant and Industrial Fuel Use Act, restricting construction of new natural gas power plants and encouraging the use of coal as a fuel source.
Now gas is in, coal is out, and the fate of the 1,300-MW Seminole Generating Station in Florida, built in the wake of the 1978 law, hangs in the balance.
That’s why Lisa Johnson wants a well considered, go-slow approach to proposed Environmental Protection Agency (EPA) greenhouse gas regulations, lest the cycle of policy contradiction repeats itself in 25 years.
“This is such a big topic that you have to hear the whole story,” says Johnson, CEO of Seminole Electric Cooperative in Tampa, Fla., which owns the power plant. “I think you have to look at all aspects of the decision-making and the implementation of that decision-making. If you look at it in a vacuum, it takes you right to where we are today as we look back at the Fuel Use Act.”
If it is possible to evangelize on behalf of a power plant, Johnson is wearing a frock. She has been riding the circuit from the halls of Congress to local co-op meetings, outlining how EPA’s Clean Power Plan could stunt the flow of reliable and affordable power for Seminole and its member co-ops.
View Photo Gallery | Seminole Generating Station“Anywhere she can go and speak about it, she’s there, and she does a fantastic job,” says Kelley Smith, NRECA Florida director and a member of the Clay Electric Cooperative Board of Trustees since 1987. “She knows how to explain it in layman’s terms so that people can understand what’s happening. She is on it.”
Johnson has led the Tampa-based Seminole Electric generation and transmission cooperative (G&T) for two years. She has loads of electric utility experience, including seven years as senior vice president and chief operating officer at Old Dominion Electric Cooperative (G&T) in Glen Allen, Va.
She is well aware of the industry’s reputation of just saying “no” every time EPA stirs. In some cases, she says that’s been legitimate; in others, regulatory fears have not been fully realized.
Johnson says the planned curb on greenhouse gas emissions is different. Traditionally, environmental regulators have set caps on emissions and let states and utilities figure out how to meet them.
“We’ve got a rule in front of us that there’s no technology for,” she says. “If you don’t have a technology to solve CO2 production from the combustion of fossil fuels, your only option is not to combust them as much.”
That’s why Seminole Generating Station, which a consultant to the G&T says has at least 30 more years of useful life, is in the rule’s crosshairs.
Every Little Gain Counts
Question: When is a power plant not a power plant? Answer: When it’s a water treatment facility, a recycling plant, a coal ash impoundment facility, an air quality monitoring station, and a half-dozen other systems operating at once.
“When you look at a power plant, most people just think of the cooling towers and the steam you produce,” says Troy Patton, who combines the roles of process engineer and plant chemist at Seminole. “But in reality, there are so many support processes that it almost feels like electricity is a byproduct just because of the footprint that you have to operate under.”
When Seminole Generating Station opened its twin 650-MW units for business in 1984, its environmental permit was 10 or 12 pages. Regulation can be a one-way ratchet though, and the permit now exceeds 100 pages.
Seminole has spent $530 million on environmental upgrades, with more than $262 million of that coming since 2006, primarily to comply with EPA’s interstate pollution rule that established limits on sulfur dioxide and nitrogen oxide. Managers say the plant now produces fewer tons of CO2 for every kilowatt it generates. Emissions levels of SO2, NOx, particulates, and carbon monoxide also have fallen.
Between environmental considerations and economic pressures, every little gain counts.
“Operating day to day is vital, but you have to have the forward approach to anticipate what will help you be economical and viable for the future,” Patton says.
‘If We Just Had More Time’
Johnson and the Seminole Electric board are on parallel strategic planning tracks. One holds that Seminole Generating Station will continue to operate through 2045, its anticipated life cycle, as it produces more than 50 percent of the power the G&T sells to nine member systems and 1.4 million residential and business users in Florida.
The other track anticipates the retirement of the plant as Florida tries to meet a 26.3-million-metric-ton reduction in greenhouse gas emissions. That would represent a 34 percent cut in emissions starting in 2020. Fitch Ratings, the global financial service, says the EPA Clean Power Plan is tougher on Florida than any state except Arizona.
If that happens, the Sunshine State could become the Natural Gas State. Florida gets about 61 percent of its power from natural gas, according to the Energy Information Administration. Under EPA models, Florida would retire more than 10,000 MW of coal capacity and rely on natural gas for 85 percent of its power by 2025.
Johnson says that’s dangerous. “Fuel diversity is critical to reliability,” she says. “All it would take is one supply disruption, one hurricane, and you would be dealing with major supply constraints and reliability issues.”
Switching fuels is not an option for the existing Seminole station. It is not inconceivable, Johnson says, that the G&T could build a new natural gas plant on its existing campus north of Palatka and south of Jacksonville. There’s enough room at 2,000 acres and some transmission capability.
But Florida lacks needed pipeline capacity. Permitting and construction would push any plant beyond a 2020 start date and do nothing for displaced workers; it would take perhaps 30 people instead of 300 to operate such a facility.
“Can we do something? Yes. I’m optimistic that there are options and that the options become broader if we just had more time,” Johnson says. “I just don’t believe we can do it in the time frame envisioned.”
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