The Tennessee Valley Authority board of directors voted to shut down two aging coal-fired power plants, defying a tweet from President Donald Trump on Monday urging the agency to keep one of them open.
The TVA directors voted overwhelmingly to close the Paradise 3 plant in Kentucky and the Bull Run plant in Tennessee. Three of the four people appointed by Trump to the TVA board joined the 6-1 majority voting to close down the Paradise coal unit and all four joined the unanimous vote to retire Bull Run.
“It is not about coal. This decision is about economics,” TVA chief executive William D. Johnson said. “It’s about keeping rates as low as feasible.”
The sole vote in favor of propping up Paradise 3 came from Trump appointee Kenneth Allen, who earlier had been the chief operating officer at Armstrong Coal and president of Bluegrass Coal, both coal-mining companies.
TVA is a federally owned corporation. While its directors are appointed for five-year terms by the president, it functions as an independent agency. Two of its nine seats are currently vacant.
Trump, who vowed during his campaign to help the coal industry, set up a clash with the TVA with his call to keep open the Paradise 3 unit, which buys much of its coal from a mining company chaired by Robert E. Murray, one of the president’s major donors and supporters.
In a tweet Monday night, Trump said: “Coal is an important part of our electricity generation mix and @TVAnews should give serious consideration to all factors before voting to close viable power plants, like Paradise #3 in Kentucky!”
The same day, Senate Majority Leader Mitch McConnell, R-Ky, released a video urging TVA to keep the plant open. He said Paradise 3 was “too important to shutter especially for the hundreds of jobs it supports directly and indirectly.” He said the vote should wait until the TVA board was at full strength.
But even if two new board members had voted in favor of keeping the plants open, it would not have been enough to alter the outcome.
The board decided that it would be too costly to keep the 49-year-old plant, which operated only intermittently last year because it was no longer needed to supply uninterrupted power known as baseload. The plant will close by December 2020.
At one time, coal mines in Muhlenberg County were among the nation’s biggest, and they prompted the singer John Prine to write a 1971 song called “Paradise.”
The board also voted to close a 52-year-old coal unit at Bull Run near Oak Ridge, Tennessee, by December 2023.
John M. Thomas III, TVA chief financial officer, said that closing the two plants would save ratepayers $320 million without affecting the reliability and resilience of the agency’s fleet. He said that the coal plants weren’t designed to be turned on and off, and that the TVA had been “running them at times when they are not economical.”
Moreover, both plants would require about $1.3 billion in capital investments
Thomas said that even after closing the plants, coal would account for 17 percent of the TVA’s power generation in 2028.
But the coal industry has suffered from cheap natural gas and renewable energy. Two other coal units, Paradise 1 and 2, on the same site in Muhlenberg County in western Kentucky, were replaced with natural gas generation in the spring of 2017. The Paradise Unit 3 employs about 140 people.
Murray, founder of Murray Energy and a leading donor to Trump’s 2016 presidential campaign, has been pressing the president to help prop up coal-fired plants since the beginning of the administration. In Energy Secretary Rick Perry’s first month in office, Murray presented a four-page “action plan” to rescue the coal industry. The plan said that commissioners at three independent regulatory agencies “must be replaced,” Environmental Protection Agency staff slashed, and safety and pollution rules “overturn 1/8ed 3/8.”
As recently as 2013, Murray Energy was delivering nearly 100,000 tons of coal a month to the Paradise coal plant.
But competitive pressures have hurt coal mining. Since November 2013 and including Thursday’s decision, the TVA board has now approved the retirement of 18 coal-fired electric power units at five plants, according to its filing with the Securities and Exchange Commission.
Thomas said closing the plants was “the most economical decision.”
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