Dominion will shut down State Line plant

Posted: 11/20/2010

From Post-Tribune of Northwest Indiana:

Dominion will shut down its State Line Energy power plant in Hammond sometime between 2014 and 2017 when stricter environmental rules take effect, a company official confirmed Friday.

What would happen to the plant and its 120 employees after that is uncertain.
"Today, with what we know, with what we believe to be ahead of us with environmental regulations, we believe sometime between 2014 and 2017, we'll be closing the plant," Dominion spokesman Jim Norvelle said.

Dominion's chief financial officer, Mark McGettrick, announced at a financial conference on Nov. 2 that the company would shut down two plants -- State Line in Northwest Indiana and Salem Harbor in Massachusetts -- rather than investing in environmental controls or switching to a cleaner-burning fuel.

Instead, Dominion will invest $2 billion in environmental controls at a Somerset, Mass., plant.

"We have announced that two of our coal plants will shut down in the future when environmental rules are clear. The first is Salem Harbor in the Northeast," McGettrick said at the Edison Electric Institute conference. "The second plant that we've announced that we would not operate beyond 2017 is the State Line power plant in Indiana. We're not going to invest capital controls in that, and when (the Environmental Protection Agency) came out with the one-hour (sulfur dioxide) rule, it was clear that life of that plant was either between 2014 or 2017, depending when the state of Indiana comes out with their implementation plan."

States have to flesh out a plan for how they intend to meet new federal standards for sulfur dioxide. EPA announced in June that it is setting tighter standards for short-term exposure to protect millions of Americans from sulfur dioxide, which can aggravate asthma and cause other respiratory difficulties.

The Hammond power plant meets current limits by burning low-sulfur coal, but has no scrubbers to reduce sulfur dioxide emissions on any of its two units, Dominion's Norvelle said.

Most modern power plants, including those at Northern Indiana Public Service Co., already use scrubbers. Dominion has the choice of reducing pollution by installing modern pollution control equipment or shutting down the plant.

"What's coming out of the plant is killing about two dozen people a year. That's pretty significant," said Brian Urbaszewski, director of environmental health policy of the Respiratory Health Association of Metropolitan Chicago. "That's our focus, trying to get the plant cleaned up. We can't control if they threaten to shut it down. How they want to address it is up to them."

Environmentalists estimate air pollution from the plant costs residents up to 200 miles away $77 million in damages per year. The scrubbers State Line would need to meet the new standards would cost between $125 million and $200 million. That's a fraction of the $2 billion that McGettrick said the company would invest in environmental improvements at its Brayton Point power plant in Massachusetts.

Norvelle said that investment is feasible because Brayton Point produces 1,530 megawatts of electricity -- about three times more than State Line. He wouldn't confirm how much it would cost to upgrade the Hammond plant.

"Those numbers would be proprietary. All we know is, it doesn't make economic sense for us," he said. "A lot of that is because it's a large generation. It's more megawatts than State Line and more than others in Massachusetts. It makes economic sense for us to invest in environmental equipment at that location because you can spread the cost over more megawatts. It's economy of scale."

Norvelle said Dominion expects to operate State Line for another seven years but would work with employees to find jobs at another Dominion plant or elsewhere when the time comes. The closest Dominion plants are outside Chicago and in Kincaid, Ill.

He said it was too early to say whether the plant would be sold.

Environmentalists were happy with the shutdown decision but hope it can happen sooner given that the EPA has sued Dominion for air permit violations, including having thicker smoke than the plant's permit allows.

"Dominion seems determined to run this old clunker as long as it can without investing in modern pollution controls," said Howard Learner, executive director of the Environmental Law & Policy Center.

"It's time for (the Indiana Department of Environmental Management) and U.S. EPA to step up and tell Dominion to either install pollution controls now or shut this plant down. Enough is enough."

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