This Might Be the Last Traditional Coal Power Plant to Be Built in America
Environment

This Might Be the Last Traditional Coal Power Plant to Be Built in America

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In rural, central Georgia, in a small city called Sandersville in Washington County, a former state legislator with a blighted record, Dean Alford, is trying to build a coal plantand it has not been going well. A few years in, Alford’s business partner Dwight Brown was indicted for racketeering. Townspeople say Alford is just trying to turn a profit for himself and his friends in the Tarbutton family, a local dynasty that owns the railroad that would supply the plant. Though the plant's prospects for completion are dimming, environmentalists' interest in the project has grown as it becomes clear that this could be the last traditional coal-burning power source built in America. A close look at the effort to build the plant reveals a labyrinthine small-town drama full of old boys' networks and well-kept secrets.

Coal is in dire straits for several reasons: natural gas has become cheap and abundant since hydraulic fracturing, or fracking, made vast reserves available in the late 2000s; the prices of wind and solar power have fallen (solar panels cost 80 percent less now than they did in 2008; the cost of operating a wind farm is down 38 percent in the same period); and President Barack Obama is in the midst of cracking down on carbon emissions. Quite simply, coal has become a bad investment. The Boston-based think tank Synapse recently released a study showing that power companies could make more money by retiring 73 percent of existing coal plants and building gas plants instead; Synapse also reports that “utilities have decided to reject, cancel or significantly delay more than 60 proposed coal power plant projects in just the past two years,” largely for economic reasons. In a recent projection, the U.S. Energy Information Administration guessed that not a single coal plant will be built between 2018 and 2035. Plant Washington, as the Georgia project is known, is the coal industry’s best bet for another set of old-fashioned smokestacks1and a good primer in the motivations that could induce someone to build a coal plant right now.

Plant Washington was proposed in 2008 by Power4Georgians, a company founded by Brown and comprised of ten local Electric Membership Corporations (called EMCs, a type of member-owned utility co-op popular in southern states). There have been a few wrinkles. First, the plant turned out to be expensive: Early estimates put the cost of constructing it at $2.1 billion, though watchdog groups calculate that the price tag would be $3.9 billion or more. That expenditure, plus the cost of burning coal, could send locals’ electricity bills sky-high if the plant is completed, according to local consumer advocate Georgia Watch.2 Second, Brown turned out to be on the wrong side of the law. He was the CEO of one of the founding EMCs, Cobb, and was indicted for fraud, racketeering, and corporate theft when allegations surfaced that he had spun that non-profit into a for-profit company called Cobb Energy that he used, among other things, to pay himself a $600,000 annual salary and millions in loans.

Before Brown was exposed, he had contracted Alford, one of his business partners in Cobb’s for-profit dealings,3 as developer of the plant. Alford turned out not to be squeaky-clean, either: As a member of Georgia’s House of Representatives in the early 1990s, he voted for an energy program called House Bill 280 that landed him a $1 million contract with Georgia Power. Today, Alford holds a coveted seat as a regent on the University System of Georgia’s board, and he’s friendly with the Tarbuttons, generous donors to the Republican party who were ranked on a recent list of the 100 most powerful Georgians. The Tarbuttons have been Washington County royalty ever since they bought the Sandersville Railroad Company in 1916the same railroad that would trundle in coal for Plant Washington. The plant could also mean good business for a trucking company the Tarbuttons partner with, called B-H Transfer. And, they own the land that Alford has proposed to build on. The family is well-poised to help the project along: Hugh Tarbutton is the chair of the Development Authority of Washington County, which has considered issuing bonds to help finance the plant.

Katherine Cummings, a Washington County resident who is an outspoken critic of the project, says she thinks her neighbors have been hesitant to voice their reservations because of the outsize influence the Tarbuttons wield in the roughly 20,000-person community. “The social pressure on folks has been enormous,” she told me. “I get comments from folks who say, ‘I never wanted the plant but I was afraid to speak out because of who I work for, or who my kids work for.’” Hugh Tarbutton declined to comment for this article.

But it’s looking less likely that Plant Washington will be lining any pockets, since there don’t seem to be any customers for its power. One by one, most of the EMCs have dropped out, and the four that are still involved signed a deal this summer severing their obligation to front the cost of construction. Alford insisted to me that he does have power purchase agreements, but he refused to disclose anything about them. The only confirmed investor at the moment is an energy tycoon from Colorado who has not revealed how much money he is spending in Georgia. Cummings said she and other local activists calculate that their EMCs have already given Alford in excess of $25 million over the last few yearsmoney they don’t expect to see again.

Obama’s climate action plan could cause problems for the project, too. Even if Plant Washington manages to skirt the regulations for new plants that the EPA just released, it will eventually be subject to the agency’s forthcoming rules for existing plantsstandards it could not meet under its proposed design, according to two attorneys at the Southern Environmental Law Center who have challenged the plant in the past. They project the plant will emit about 1,700 pounds of carbon dioxide per megawatt-hour; the EPA's new plant rules cap emissions at 1,100 pounds per megawatt-hour. As one of the attorneys put it, “If this were a public company with shareholders, I think they would have abandoned this project.” 

If the plant does get built, it will be bad news for Georgia residents. Georgia Watch found that between the cost of building the plant and the price of coal right now, EMC members contracted to Plant Washington would find themselves paying between 54 and 103 percent more for their power by 2017 than they will if they stick to their current sources. In contrast, the state’s biggest utility, Georgia Power, is retiring 15 coal and oil units because they’ve proven bad for business. And, of course, there will be an environmental cost. Cummings says Washington County residents already suffer high rates of lung disease because they live about 70 miles east of Plant Scherer, one of the dirtiest power plants in the country. State environmentalists point out that Georgia has suffered chronic droughts and water shortages over the past decade, and the plant would guzzle 13 to 16 million gallons a day.

Alford laughed at me when I mentioned his critics and he dismissed the Georgia Watch report as “absolutely full of flaws.” He took umbrage when I asked if he would be one of the plant’s customers. “Potentially yes,” he said, but he wouldn’t tell me which EMC he was in, if any. “It’s nobody’s business where I live.”

Environmental advocates say they hope Plant Washington will just fade away, but it’s too soon to take that for granted. This summer, Washington was one of sixteen coal plants that conservation groups feared the EPA would deem far enough along to exempt from its new rules. By last month, that number had dwindled to three, and the other two plantsone in Kansas and one in Michiganhave hit recent, likely fatal snags, according to David Doniger at the Natural Resources Defense Council. “While I honestly think it’s unlikely that Washington will ever get built due to funding and air quality issues, it is the most likely of the three to see completion,” Sean Sarah of the Sierra Club told me. The Kansas plant’s air permits were invalidated by the state supreme court, and the Michigan plant seems unable to comply with mandatory pollution caps.

Alford insists that the plant will be built in the next “48 to 50 months,” though he wouldn't offer specifics on when it might break ground. With or without Washington, coal "is currently on the outs," as Sarah put it, and the next generation of plants is dwindling toward zero.

1

This does not include plants that are being built using a new, as yet unproven technology called Carbon Capture and Sequestration (CCS), which will attempt to reduce emissions by capturing carbon and burying it underground. As Brad Plumer at The Washington Post wrote last month, CCS might be the only option that would allow coal plants to comply with Obama's new carbon standards, but it remains to be seen if the technology "will ever be viable."

2

Plant Washington customers could face the same fate as midwesterners whose towns invested in a coal plant called Prairie State, which came in $1 billion over budget and charges more than twice the market rate for power. Normally, EMCs buy power from existing utilities at the best rates available; it is highly unusual for them to own a large asset such as a plant.

3

Alford is the president and CEO of Allied Energy Services, a former subsidiary of Cobb Energy. When Alford ran Allied under Brown, he wracked up over $4 million in lossesBloomberg still lists Allied as a subsidiary of Cobb EMC.  

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