When I started work at Alabama Electric Cooperative in 1989, all of our generation resources were coal-fired. We had the McWilliams Plant, a small plant built in the 1950s. We also had the Lowman Plant on the Tombigbee River, which consisted of three units. Unit #1 was completed in 1969, and Units #2 and #3 were completed in 1979 and 1980, respectively. The McWilliams Plant was converted to natural gas in the early 1990s, but the Lowman Plant is still prominent in our generation portfolio today.
Most coal plants, especially those built in the 1960s, 1970s and 1980s, use water to move coal ash from the boiler bottoms to coal ash holding ponds. The ponds allow the ash to settle out of the water and, as the ponds fill, the ash is moved to long-term storage areas.
At the time the Lowman Plant was built, unlined coal ash holding ponds were the norm. Lowman’s ash holding ponds were lined with 6 feet of compacted clay, which provides a barrier between the pond and groundwater. Today, however, they are considered unlined ponds.
The Lowman Plant was constructed and has been operated in accordance with all federal and state environmental regulations and permits, but things change, and the view of coal ash holding ponds has changed. The Coal Combustion Residual (CCR) Rule, implemented by the Obama EPA, changes how coal ash is handled and stored. The rule continues to be litigated, and changes have been made by the Trump EPA.
The CCR Rule prohibits the deposit of coal ash into unlined coal ash ponds after October 31, 2020. The deadline continues to be litigated, and recent rulings indicate the current deadline will stand, if not become accelerated. Because we will not be able to move coal ash to our ponds after October 2020, we are left few choices other than to close the Lowman Plant and obtain additional generation resources to replace the coal-fired generation.
With additional uncertainty surrounding the Effluent Limitations Guideline rule and other environmental regulations, we decided to cease operations at the Lowman Plant at the end of October 2020, cap and close the ash holding ponds, demolish the Lowman Plant and construct a natural gas combined cycle unit on the site to replace the Lowman generation capacity.
With closure of the Lowman Plant, we lose the diversity of coal-fired generation as a natural hedge against higher natural gas prices, and we are more dependent upon natural gas as a generation fuel. (The Lowman Plant has been economically dispatched ahead of our most efficient natural gas units for the past four weeks because of higher-priced natural gas.) However, the greater loss is the loss of a number of our people employed at Lowman.
We currently employ 150 people at Lowman. After replacing the Lowman coal-fired plants with a natural gas combined cycle unit, we will only require 35 employees. A number of our Lowman employees are eligible for retirement, and more will be eligible by October 2020. Unfortunately, we will not be able to maintain some of our current Lowman employees with the operation of the natural gas plant, and they will have to find other employment.
Our Lowman employees have worked around the clock, on holidays we enjoyed with our families, through storms and other disruptions to keep your electricity on. They learned to ramp the coal units to follow load changes and implement innovative repairs to keep the Lowman units online at higher availability rates than those of other utilities. They have been remarkable and have done what needed to be done to provide affordable and reliable electric service for PowerSouth’s members.
It is sad and disheartening that environmental activists, politicians, bureaucrats and others have allowed environmental and climate change movements to close coal-fired units and cost good, hardworking people their jobs and livelihoods. The real victims are the hopes and dreams of Lowman employees, people with families, lives and needs that were met with their employment at the Lowman Plant, not the abstract climate threats to public health. Maybe one day our leaders will understand the real damage they have done.
I usually end by wishing you a good month. It is difficult for me to end on a happy note knowing that good people will soon be looking for new jobs because of extremist environmental ideologies.