By Steven Johnson | ECT Staff Writer
Electric Co-op Today
Editor’s note: In a special report, ECT.coop and RE Magazine look at the effect of EPA’s Clean Power Plan on a Florida power plant and the community that embraces it. Follow RE Magazine and REmagazine.coop starting August 3 for additional coverage.
PALATKA, Fla.— Brian McDaniel has seen the beginning and the middle of the Seminole Generating Station’s life. He hopes he is not witnessing the end.
As a teenager, McDaniel was part of a hunting and camping club across U.S. 17 from where the 1,300-megawatt, twin-unit facility was rising out of the scrub pine stands of north Florida.
Now he is a maintenance superintendent at the power plant, which could go dark if the Environmental Protection Agency’s proposal to control carbon dioxide emissions from existing coal plants, like Seminole Generating Station, becomes reality.
“I think there’s a lot of denial right now. It’s kind of the subject people want to avoid,” McDaniel said. “The denial is not because people are comfortable that it won’t happen. It’s kind of the unmentionable: ‘We don’t want to talk about it.’ ”
As EPA puts the final touches on its Clean Power Plan, Putnam County has become an unlikely proving ground for the tradeoff between reducing greenhouse gas emissions and pushing an economically distressed region over the edge.
At stake are the fates of about 300 employees at Seminole Generating Station, as well as 400 to 500 related jobs that keep the economy moving in Florida’s poorest county.
“I believe the majority of the people in our community and our state believe we should be going more and more to renewables,” said NRECA Florida Director Kelley Smith, a former state legislator and member of the Putnam County Commission that gave the plant the go-ahead in the early 1980s. “I’m in favor of evolution. I’m just not in favor of revolution, and that’s what’s going to happen.”
The 31-year-old plant is the backbone of Seminole Electric Cooperative, providing the Tampa-based G&T with more than half of the power it needs for its nine member electric cooperatives and 1.4 million homes and businesses.
Times have changed, though, since the plant was built in the wake of a 1978 act of Congress that all but required the use of coal for new generating facilities.
Seminole Generating Station uses about 10,000 tons of coal daily, putting it in the crosshairs of the proposed Clean Power Plan. EPA wants a 34 percent reduction in carbon dioxide emissions from the power sector in Florida, starting in 2020, and a 38 percent cut by 2030.
Compliance time is short, and Fitch Ratings, the global financial analyst, says the preliminary EPA regulations would hit Florida harder than any state except Arizona. Workers at the plant face years of uncertainty since the regulations likely will undergo numerous court challenges.
“We’re not at the angry stage yet, but we’re at the apprehensive stage,” said Nicole Livingston, supervisor of budget and administration at the plant. “It feels like people are making decisions that really don’t have a good idea of what we’re doing here.”
As production manager, Ed Gonzalez is responsible for the safe and reliable operation of Seminole Generating Station on a given shift. The workforce is anxious about its future and knows it is under a microscope, he said, which is reason to strive for improvement.
“Especially with the EPA, everybody is very aware of what’s going on,” Gonzalez said. “More than ever, if we did a good job yesterday, we’ve got to do it better today and even better tomorrow.”
If the EPA guidelines cannot accommodate Seminole Generating Station, there’s probably not much hope for any coal plant. The G&T has invested $530 million—$262.4 million of that since 2006—into environmental upgrades to stay ahead of the regulatory curve. In 2009, Power magazine named Seminole Generating Station as one of the top six coal plants in the world.
“We are constantly asking, ‘What can we do to be safer, more environmentally compliant and more competitive?’” said Brenda Atkins, director of plant operations since 2008. “What you see is silos have been broken down at this facility, which allows us to work in unison and be the best plant we can be.”
If the plant is idled in spite of its accomplishments, Seminole Generating Station still will have outstanding loans that stretch to 2042. Assuming no additional major upgrades, the plant will have $876.4 million in debt at the start of 2020 and $485.4 million at the start of 2030, according to projections from the G&T.
Seminole, its member co-ops and their consumer-members would be on the hook for those bills, as well as the replacement power the G&T would acquire. Officials at Seminole’s distribution co-ops say higher electric bills would be a certainty.
“This is going to hurt. It’s real people that have to pull this money out of somewhere or not spend it somewhere else,” said Derick Thomas, director of member and public relations at Clay Electric Cooperative in Keystone Heights.
‘THE DONUT HOLE’
In the latter part of the 19th century, Palatka, the county seat, was a thriving hub of tourism and commerce with steamships along the St. John’s River, multiple railroad lines and visits by three presidents, including Grover Cleveland, who honeymooned there.
But an 1884 fire wiped out downtown, subsequent freezes destroyed the citrus industry, and Palatka and Putnam County found themselves as landlocked bystanders when development and prosperity passed them by.
“We’re in the donut hole,” said Putnam County Commissioner Chip Laibl, drawing his hands in a circle. “We’re not quite part of northeast Florida, we’re not quite part of the Gainesville region, we’re not quite in the Daytona Beach region.”
More than 26 percent of Putnam County’s 72,523 residents live below the poverty line. That number soars to nearly 43 percent of residents under the age of 18. The region, Laibl said, simply cannot afford to lose Seminole Generating Station.
The plant was the biggest taxpayer in Putnam County at $5.1 million in 2014 and a major reason why, despite its struggles, the county has Florida’s third highest percentage of workforce in manufacturing.
Dana Jones, president of the Putnam County Chamber of Commerce, said a shutdown would cost an estimated $8 million in personal income as well as 700 to 800 direct and indirect jobs in a county that places near or at the top of the Sunshine State’s unemployment ranks.
“When you pluck out 800 of your finest, all of a sudden the community is suffering financially worse than it was before, and our resources in people decline significantly,” she said.
No one expects green jobs to fill the void.
“Unless you’re in agriculture, farming, or something like ecotourism, folks are moving toward areas where there are more computer-based opportunities,” said Bobby Payne, senior project development representative at Seminole Electric Cooperative. “There’s a real disparity in opportunities for people in our area who like to work with their hands. Those jobs just aren’t available.”
A closure would be a deep cut in a community that experienced a similar nick at the end of 2014, when Florida Power & Light closed a small, aging natural gas-oil power plant in East Palatka. Twenty-three employees were given job opportunities elsewhere.
“It was a little wake-up call,” Jones said. “While it didn’t really constitute a huge layoff, it was a closure and people relocated who once lived here. I think it was that same jolt with people saying, ‘Oh my, we really can have plants close.’ ”
‘YOU ARE THE COMMUNITY’
If Palatka loses the plant, it loses a partner. In a small, rural community, that loss might be as painful as the exodus of jobs.
Go to the livestock show and there’s the Seminole banner. Walk into the Chamber of Commerce and there’s a room with Seminole’s name. Check out the Bostwick Blueberry festival or make plans for this October’s motorcycle ride to benefit mortgage-free homes for injured war veterans, both programs that Seminole supports.
The plant itself donates more than $30,000 a year to various causes and is backed by the G&T for even more donations and contributions in the community.
Osteria Williams recently received the Seminole-sponsored 2015 Career and Technical Education Superstar award for Putnam County, where only 11.4 percent of the population has earned four-year bachelor’s degrees.
“Our accomplishments, success and future mean so much to you, and it shows,” she wrote in appreciation. “You give us the reason to go the extra miles, do the additional work, and try our hardest.”
As Chip Laibl, the county commissioner, put it: “You guys have been tangible; tax-wise a great partner and community-wise, we feel you all the way down to pee wee soccer. Your tents are everywhere. It means a whole lot. You are the community.”
In that way, the fate of Seminole Generating Station and the fate of the community are inextricably linked. Brian McDaniel’s wife is an elementary school principal, and he hears about the plant’s civic involvement at school and social events.
“You cannot go to one of these functions without somebody saying, ‘Hey, Brian,’ and they point at Seminole Electric contributing to events,” he said. “If this plant wasn’t here today, it’d be a pretty big blow. It’s not just the fact that we have people on site; it would be a pretty devastating blow to the community.”
The plant is not going to go down without a fight. Lisa Johnson, CEO of Seminole Electric Cooperative, has testified before Congress and met with EPA Administrator Gina McCarthy and officials at the Office of Management and Budget. The G&T and its member co-ops have rallied members to send emails to members of Congress. There is an open invitation for an EPA representative to visit the plant and hang around Palatka.
“I talk to a lot of people,” said Kelley Smith. “Sometimes it gets around to this discussion and I can tell you, in our community, it’s like, ‘No, we’ve got to save Seminole Electric.’ That’s the way it is here. It’s a big, big impact for us.”