As early as next year, the rates that Associated Electric charges would increase more than 50% above the increase that would be expected without the Environmental Protection Agency’s power plant rule. Those increases are a direct result of the massive costs that the rule creates. Associated Electric will be forced to pass those costs on to its consumers, at least 40% of whom live in poverty.
Associated Electric is a not-for-profit generation and transmission cooperative that provides power to 51 local electric cooperatives in Missouri, Iowa and Oklahoma. Together, these cooperatives serve about 935,000 homes, farms, schools and businesses. Associated Electric uses a mix of sources to generate electricity, including hydropower, coal, natural gas and wind.
Associated Electric owns, operates and depends on five coal-fired generating units. Replacing them is expected to cost more than $3 billion. As a member-owned cooperative, Associated Electric will be forced to pass those costs on to its consumers, at least 40% of whom live in poverty.
The Environmental Protection Agency’s power plant rule allows coal-burning power plants to remain in operation beyond 2038 only if they can achieve 90% carbon capture by 2030. That is not possible at Associated Electric’s Thomas Hill or New Madrid plants.
The technology to achieve 90% carbon capture isn’t available, and even attempting to meet the rule’s unachievable capture standards would be prohibitively expensive. Beyond that, carbon dioxide would need to be transported for storage, and no pipeline exists near the plants or could be built before 2030. Furthermore, there are no carbon dioxide storage sites near Associated Electric’s service area.
To keep operating through 2038, the Thomas Hill and New Madrid plants would need to be retrofitted to co-fire with natural gas. The cost of this new equipment alone is estimated at more than $116 million. Converting the units would reduce their efficiency and require Associated Electric to find replacement power, either via market purchases or by building new generation.
If the power plant rule goes into effect, electric markets are expected to be highly constrained. This means the most cost-effective option would be to construct new generation. The only viable option is to use a large number of low-capacity combustion turbines all running at a capacity factor of 20% or less to offset the decreases in efficiency that come with co-firing.
Beyond that, once the Thomas Hill and New Madrid plants are retired, Associated Electric will need to find replacement power. In order for it to be available by 2030, Associated Electric needs to start spending money now on planning, engineering, siting, permitting and construction.
As early as next year, the rates that Associated Electric charges would increase more than 50% above the increase that would be expected without the power plant rule due to the massive costs that the rule creates.