The city of Alexandria and GenOn Energy have reached an agreement to permanently close the company’s Potomac River Generating Station, ending a long effort by city council members and residents to shut down the plant, which has been repeatedly fined for environmental violations.
To facilitate the retirement of the plant, which began operating in 1949, Alexandria will release approximately $32 million currently held in escrow, which was set aside to pay for additional environmental controls at the station as a result of a 2008 agreement between the City and GenOn.
“Today’s announcement is a path forward for both Alexandria and the power company that works for everybody, and truly reflects the interest of both parties,” said Alexandria´s Mayor William D. Euille.
Under the terms of the agreement, GenOn has agreed to retire the generating station by October 1, 2012, or, if the plant is needed beyond that date for reliability purposes, as soon as it is no longer needed. GenOn will coordinate with PJM Interconnection LLC, Pepco, and government regulators for the necessary notifications and approvals to close the plant.
“This decision is not an easy one, but current wholesale electricity market conditions and the release of the $32 million of escrow funds are the major factors for the decision,” said GenOn spokeswoman Misty Allen.
A July report released by the nonprofit American Clean Skies Foundation (ACSF) concluded that once transmission and substation upgrades were completed in 2012, the station could be shuttered without adversely impacting the power supply to the nation´s capital — though it also said the District or federal regulators should ask Pepco and PJM to confirm the absence of any reliability issues before the closing of the plant.
D.C. Mayor Vincent C. Gray, concerned about high levels of sulfur dioxide emitted by the plant and the adverse effect it may have on D.C. residents, announced last month he was also considering a petition to the Environmental Protection Agency to shut it down.
In 2011 alone, the station and the Virginia Department of Environmental Quality reached a consent order for the plant to pay $276,000 for emission violations.
Earlier this month, the ACSF released a plan that would replace the plant with a $450 million mixed-use development featuring 89,600 square feet of office space, 114,500 square feet of retail and restaurants, 467 multi-family homes and 96 townhouse units.
Local officials, who had long pushed for the plant´s closure, lauded the decision.
“This was a long fought but well won victory for the citizens of Alexandria and the nation’s capital,” said Rep. James P. Moran Jr., Alexandria Democrat. “What once was the largest stationary source of air pollution will be no more. … The extinction of this dinosaur of a facility is heartily welcomed.”
Delegate David Englin, Alexandria Democrat, while calling the agreement a “historic step forward,” tempered the celebration with some words of caution.
“Before we throw a going-away party … the agreement does seem to leave a little wiggle room,” he told The Washington Times. “There’s no reason to believe the agreement is not operating in good faith, but we do need to make sure the plant does close as intended.”
In 2005, the Virginia Department of Environmental Quality ordered the plant’s former owner, Mirant, to reduce pollution or shut down the plant, but the D.C. government and the U.S. Department of Energy stepped in to keep the plant operating to provide power to the D.C. area.
In 2007, PJM and Pepco told the Federal Energy Regulatory Commission (FERC) that they planned to undertake a set of transmission and substation improvements that would resolve reliability issues if the plant close.
• David Sherfinski can be reached at dsherfinski@washingtontimes.com.
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