By Jon Kamp and Kris Maher
SOMERSET, Mass. -- Far from the mines of Appalachia, the decline
of coal is hitting communities that relied on coal-fired power
plants for jobs and income.
During the past five years, roughly 350 coal-fired generating
units shut down across the U.S., ranging from small units at
factories to huge power plants, according to data from the Energy
Information Administration. A single power plant could have one or
several units.
Many of these plants were built near the source in Appalachia
and western states. But generators built in far-away places like
New England have also turned off.
The shutdowns can cost communities both high-paying jobs and
important sources of tax revenue. Natural-gas-fired plants have
quickly mushroomed up across the U.S. to replace the retiring coal
generators, but those plants need far fewer workers -- one for
every five that worked at a coal plant, by some estimates.
A 54-year-old coal-fired plant here stopped operating three
weeks ago, and local officials started raising property taxes
several years back to compensate for lower revenue from the town's
largest taxpayer as production slowed.
In Adams County, Ohio, where Dayton Power & Light has said
it will shut two coal-fired plants, county auditor David Gifford
sees a host of knock-on effects including layoffs for public
employees, program cuts for seniors, libraries and schools, as well
as a steep hike in property taxes. The plants contributed more than
30% of the county's $27 million in total tax revenue.
"If the power company shuts their doors, then John Doe on the
street is going to have to pay for it," Mr. Gifford said.
A DP&L spokeswoman said the company decided the plants
wouldn't be economically viable beyond mid-2018, and "we faced an
important and difficult outcome."
It is a scenario being played out elsewhere as more coal-fired
power plants retire, squeezed out in part by new, cheaper-to-run
natural gas-fired plants.
Two entire plants in New Jersey also closed in June, and more
coal units are scheduled to close in places like Tennessee and
Michigan. Carbon County, Utah, is still smarting from the loss of a
small coal-fired plant two years ago, said Seth Oveson, the county
clerk and auditor.
Cassville, Wis., lost 55% of its tax revenue when two former
coal plants on either side of town, including one that was
converted to burning biomass, shut within four months of each other
in 2015, said Keevin Williams, president of the village of 950
people.
Mr. Williams himself worked at one plant for 31 years before
retiring. Others moved away to find work. The village on the
Mississippi River has cut staff and put off projects, he said.
"We're a small community. When you lose 90 jobs, that's 10% of
your population," Mr. Williams said. "That's made things very
tough."
Last year, natural gas surpassed coal for the first time in U.S.
electricity generation, providing 34% of the nation's power, versus
30% for coal, according to the EIA. As recently as 2011, coal
provided roughly 43% of generation.
The reduction in coal-fired power underscores the challenge for
President Donald Trump in fulfilling his promise to aid a flagging
coal-mining industry because power plants are by far the main
consumers of American coal.
Mr. Trump's moves to undo environmental regulations, and the
recent withdrawal from the Paris climate accord, are unlikely to
reverse the closure of coal-fired plants, according to Adele
Morris, policy director for the Climate and Energy Economics
Project at the Brookings Institution. Ms. Morris said their closure
is driven mainly by cheap gas and a federal rule limiting mercury
and other pollutants.
"There's an increasing awareness that coal will not return to
its former glory," said Charles Patton, head of external affairs at
American Electric Power Co., a Columbus, Ohio, utility that has
shut nine coal-fired power plants since 2011.
Neither the EIA nor the Bureau of Labor Statistics track how
this shift has affected coal-fired-plant workers. Coal-fired plants
require more staff than typically newer and simpler gas-fired
units, according to workers and utilities. A spokesman for the
Tennessee Valley Authority, which has also been retiring coal
units, said a coal plant could employ roughly 150 to 250 while a
new gas plant might need 35 workers.
In Ohio's Adams County, where 25% of the 28,000 residents live
below the poverty line, the prospect of losing the two plants is
devastating.
Mr. Gifford, the auditor for the county, said that if the power
plants close, the county could be forced to raise the property-tax
rate at least 500% in order to maintain school-district debt
payments.
Joel Hanson, a veteran at one plant, said he had thought he
would be able to work through to retirement at the power plant. Now
he may uproot his wife and two young children from the nearby town
of Manchester. "It's like having the rug pulled out from under
you," Mr. Hanson, 43, said. The Utility Workers Union of America,
which represents workers at the plants, is trying to find investors
to buy them, according to the union.
In Somerset, Brayton Point was the last coal-fired power plant
in Massachusetts, and one of just four left in New England. Prior
plant owner Energy Capital Partners decided in 2014 to shut the
plant due to competition from cheap gas, and current owner Dynegy
Inc. followed through.
The plant paid more than $13 million in taxes as recently as
five years ago, but payments have declined alongside power
production since then, and the town of about 18,000 people has had
to shift the burden to other taxpayers, town Finance Director Joe
Bolton said. Somerset already lost a smaller coal-fired plant in
2010.
Electrician David Kutz, a 32-year Brayton Point veteran and area
homeowner, will receive severance, but said he plans to find new
work to help cover medical insurance.
"This plant put so many kids through college, bought so many
houses, paid so many taxes," said Mr. Kutz, who is 59 years old.
"It's hard now seeing people go."
Write to Jon Kamp at jon.kamp@wsj.com and Kris Maher at
kris.maher@wsj.com
(END) Dow Jones Newswires
June 19, 2017 14:08 ET (18:08 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.