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Trump’s intervention fails to save coal-fired power plant

Company owned by major Trump donor supplied TVA plant with coal supplies.

The Tennessee Valley Authority’s Paradise coal plant in Muhlenberg County, Kentucky. CREDIT: Tennessee Valley Authority
The Tennessee Valley Authority’s Paradise coal plant in Muhlenberg County, Kentucky. CREDIT: Tennessee Valley Authority

The Tennessee Valley Authority’s (TVA) board of directors voted Thursday to close the last remaining unit at its Paradise coal-fired power plant in western Kentucky, ignoring calls from President Donald Trump to keep the unit open. The board also approved the closure of its Bull Run coal plant in eastern Tennessee.

The proposed closures had drawn extra scrutiny because TVA, a regional utility owned by the federal government, buys coal to fuel the Paradise plant from Murray Energy Corp. The company is headed by Robert Murray, a Trump donor and a major political ally of the president.

Closing the Paradise unit “isn’t about coal, this is about economics,” TVA CEO Bill Johnson said during the board meeting. The unit can be retired with “no impact” on reliability or resilience, he said.

TVA announced last summer that it was considering closing down the two plants. In internal studies conducted over the past six months, staff determined that the two coal plants are no longer economic and are not needed in light of cleaner, less expensive energy sources. They also concluded that retiring the coal plants would save huge sums of money system-wide, lowering electricity rates for customers and helping the regional economy.

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As a result, TVA staff recommended to the board of directors that the utility close the Paradise unit in December 2020 and the Bull Run plant in December 2023.

On Monday, however, Trump tweeted that coal is an important part of the nation’s energy mix and that TVA officials should give serious consideration to all factors before officially deciding to shut down the Paradise coal unit.

Kentucky Gov. Matt Bevins (R) and Senate Majority Leader Mitch McConnell (R-KY) also urged TVA to keep the Paradise unit open as part of their efforts to prop up the declining coal industry in Appalachia. TVA’s proposal to close the Bull Run coal plant in Tennessee faced little resistance from local and state officials.

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TVA board member Kenny Allen, who voted against the retirement of the remaining Paradise unit, warned that its closure would have a major impact on the local economy and employees at the plant. “We’ve even heard from the president on this matter,” Allen said. “I’m not completely comfortable with the recommendation.”

Prior to getting nominated by Trump to the TVA board, Allen, who was the only dissenting vote in Thursday’s plant closure vote, served as chief operating officer for Armstrong Coal. In early 2018, Murray Energy bought most of Armstrong Coal’s mines after Armstrong Coal filed for bankruptcy protection.

While working as Armstrong’s COO, Allen criticized TVA’s plans to retire two other units at the Paradise coal plant, saying their closure would have a “dramatic effect” on local coal producers like Armstrong Coal.

In 2014, at a Greater Muhlenberg Chamber of Commerce Meeting in Kentucky, Allen argued that retiring those units would impact both coal’s share of power generation in the state as well as cost the state hundreds of jobs (those units were retired in early 2017, and replaced by natural gas). In doing so, Allen effectively argued that TVA’s transition away from coal — and towards cheaper, cleaner sources of energy like natural gas or renewables — would negatively impact Armstrong’s business.

At Thursday’s meeting, TVA’s other board members disagreed with Allen’s assessment. The board, however, instructed TVA management to help employees at the plants find other jobs within the TVA system and make sure longtime employees are offered generous retirement packages.

Environmental groups celebrated the TVA board’s willingness to resist Trump on the plant closures.

“TVA made the right decision to ignore the political posturing and close these dirty, expensive, and unnecessary coal units,” Mary Anne Hitt, director of the Sierra Club’s Beyond Coal Campaign, said in a statement. “The board ignored the political games, followed their statutory mission, and were guided by the facts laid out by their own experts. Now they’re paving the way for cleaner, more affordable energy in Tennessee and Kentucky.”

The Southern Alliance for Clean Energy also welcomed Thursday’s vote.

“We applaud TVA for making the right decision and for ignoring President Trump’s Tweet and misguided support for dirty, uneconomical coal,” Stephen Smith, executive director, said in a statement. “This closure is an economic and environmental win-win; it is a good move for bill payers and for the environment.”

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Smith hopes TVA continues moving in the same direction, away from fossil fuels and toward clean energy. “There is an opportunity to continue the progress started today, and bolster communities that have relied on coal, by investing in a clean energy future and moving forward with additional coal retirements,” he said.

Paradise unit 3, which entered service in 1970, is the only operating unit remaining at the Paradise plant site. It has an operating capacity of 1,017 megawatts. Bull Run is an 872-megawatt single-unit facility that began service in 1967.

The retirement of the two plants will lower consumer costs by $324 million, according to John Thomas, senior vice president and chief financial officer of TVA.

Echoing CEO Bill Johnson’s comments, Thomas said the closures will have no impact on TVA’s operations because the federal utility “has one of the most resilient fleets in the country because of its diversity in fuels.”