BEC fighting EPA proposal

Wednesday, May 7, 2014

EPA aims to shut down coal plants, reduce emissions

In hopes of reducing carbon emissions, the Environmental Protection Agency has proposed new regulations that would do away with coal plants for electric companies, and Barry Electric Cooperative hopes the regulations are not put into effect.

Associated Electric Cooperative, which supplies power to KAMO Power, the entity that supplies Barry Electric Cooperative, has five coal plants and uses 30 percent of a sixth coal plant for power. Associated also has six natural gas generators, four gas or diesel peakers, four wind farms and hydro plants at Table Rock, Beaver and Bull Shoals lakes.

Bill Shiveley, Barry Electric general manager and chief executive officer, said although there are multiple ways the company gets its power, coal is the cheapest and most cost-effective.

"In the Midwest, 60 percent of electricity is produced by coal and, in Missouri, 70 percent of electricity is produced by coal," he said. "Coal is the lowest-cost source for power, as it's in the neighborhood of about $33-$38 per megawatt hour. Natural gas is about $55-$59 per megawatt hour, and renewables go even higher than that."

While Shiveley said coal puts out almost twice as much carbon emissions as natural gas, not using coal would result in huge increases to the bills of customers.

"If we switch entirely to gas, the price for production costs will go up 60-70 percent, and that will be passed down to the consumer because we operate on a very slim margin," he said. "Last year, we had $16 million in revenue, but our operating margin was only $400,000."

Shiveley said a hike in costs would not come immediately, as the proposal will be discussed for nine months to a year, meaning any decision would not take effect until about 2017 or 2018.

Shiveley said the worst-case scenario would be for the EPA to pass the no-coal rule, as it would lead to increased costs for customers and more difficulty building gas plants.

"If they say we can no longer use coal, we would immediately have to shut down our coal plants and there will be a mad rush to build gas plants," he aid. "That will raise those costs because of a lack of labor or lack of materials. And a higher demand for natural gas could also raise the prices."

While coal is the main producer of electricity for Barry Electric, Shiveley said there has also been plenty of money invested in using other sources of power, such as wind farms.

"We have three wind farms in north Missouri and one in Kansas, and we'll have another in Oklahoma in 2015," he said. "Those are all through KAMO Power."

Shiveley said the company has looked at using solar power as well, but panels are still so expensive it is not cost-effective.

"The price of panels will probably come down, but we're just not there yet," he said. "We do a forecast every two years to figure out what our need will be and what are the best ways for us to meet capacity. The last three or four plants we've built are gas plants, and we haven't even built a coal plant since the late '80s or early '90s."

Shiveley said Barry Electric, KAMO and Associated have together spent $1 billion in the last 12 years to reduce sulfur dioxide and mercury levels by 90 percent, and Barry Electric itself was responsible for $1 million of that total.

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