Energy plant may close

Constellation says new pollution rules too costly for Balto. Co. facility

April 15, 2006|By TOM PELTON | TOM PELTON,SUN REPORTER

Constellation Energy officials say they might be forced to close a coal-fired power plant in Baltimore County that employs 110 people because of the cost of meeting strict new air pollution control requirements.

Company officials said they might shut the C.P. Crane power plant in the Middle River area by 2013 because it's too small to make a large investment in anti-pollution equipment worthwhile.

The power company does plan to install about $550 million in filtration equipment called scrubbers and bag houses at its Brandon Shores power plant in Anne Arundel County, said Constellation Generation Group Senior Vice President John Long.

Such technology is required by federal regulations and the Maryland Healthy Air Act, passed by state lawmakers last month and signed by the governor April 6 to reduce deadly soot, sulfur and mercury air pollution.

Constellation is also weighing other options for the Crane plant, including keeping it open and meeting the new limits by switching to low-sulfur coal imported from Venezuela, Russia, Indonesia and other countries, Long said.

Constellation will make a decision after completing a study in about two months. But "it's very likely" that the company will seek to close the Crane plant, Long said.

"When you burden plants like Crane ... you could approach a situation where it's more economic to shut the plant down than to install those controls," Long said. "We now in Maryland have the most restrictive air environmental standards in the world."

Constellation, which is planning to merge with a Florida-based power company, announced this year that it would raise residential electricity rates by 72 percent this summer because of soaring energy costs and the expiration of six years of rate caps adopted as part of Maryland's deregulation of the electric utility industry.

A power industry analyst hired by advocates for the Healthy Air Act, David Schoengold, predicted that none of the six coal-fired power plants facing new pollution limits under the state law will close.

Before any power plant in Maryland is shut down, the owners have to notify the Maryland Public Service Commission, the Federal Energy Regulatory Commission and the consortium that runs the regional power grid, said PSC spokeswoman Christine Nizer. Such a notification has not happened, she said.

These entities would examine whether electric reliability in the region would be hurt, and the federal agency or the grid consortium could intervene and prevent a closure. To keep the Crane plant open, the grid could reimburse Constellation for the cost of complying with the Healthy Air Act, Long said.

The PSC wouldn't comment yesterday on the possibility of plant closures, Nizer said. But during a Senate hearing on the Healthy Air Act on Feb. 1, the commission submitted written testimony saying that the closure of Crane was "likely."

The commission also said some units of the Wagner power plant in Anne Arundel County, also owned by Constellation, "could close." It said the Dickerson plant in Montgomery County and the Chalk Point plant in Prince George's County, both owned by the Mirant company of Atlanta, could also close.

"That means that during times of peak electricity consumption there will be insufficient electricity in central and southern Maryland," the commission report said.

Del. James W. Hubbard, lead sponsor of the Healthy Air Act, said he doesn't believe any power plants will close because of the healthy air requirements. The Prince George's County Democrat said Constellation earlier this year told legislators that they were thinking about closing the Crane plant or shifting it to natural gas even before the bill was proposed.

Hubbard said he believes Constellation is trying to blame environmentalists and make them look bad to distract the public's attention from the firm's planned electricity rate increases.

"This is just scare tactics," Hubbard said.

Brad Heavner, director of the Maryland Public Interest Research Group, said Constellation this winter said it planned to keep Crane open by burning cleaner coal.

"It's preposterous," Heavner said of closing Crane. "This is just another example of Constellation trying to throw a wrench in the wheels instead of playing the game right."

The 45-year-old Crane power plant contributes about $1.7 million a year in taxes to Baltimore County. The facility is one of 35 power plants in Maryland and has a capacity of about 400 megawatts, about 3 percent of the total generation capacity in the state.

Ellen Kobler, deputy communcation director for the Baltimore County government, said county officials had not been told of any potential closing.

Constellation and Mirant each own three of the state's largest coal-fired power plants, which are subject to the Healthy Air Act's new limits.

On Feb. 17, Lisa Johnson, president of Mirant Mid-Atlantic, told a state environmental advisory council: "We see plant job loss, and a decrease in tax dollars to the local jurisdictions, and a potential impact to electric reliability."

tom.pelton@baltsun.com

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