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Mirant Ridicules Notion Virginia Plant Shutdown Spurred by Economics

Suggestions that Mirant temporarily shutdown a 482 MW power plant in suburban Virginia for economic reasons "are absolutely false," Mirant CEO Marce Fuller said last Thursday. "This is peak season for all power companies, and having this plant shut down is costing us money."

Mirant on Thursday reaffirmed its decision to temporarily shut down the Potomac River Generating Station as an action designed to respect both public health concerns of the community and the legal authority of the Virginia Department of Environmental Quality (DEQ).

The decision to temporarily close the plant arose from findings of a study commissioned under an agreement between Mirant and the DEQ. The study's computer modeling showed that air emissions from the plant have the potential to contribute to localized, modeled exceedances of National Ambient Air Quality Standards (NAAQS) under certain atypical conditions. A letter from the DEQ dated Aug. 19, 2005 and commenting on the modeling cited "...serious violations of the health-based NAAQS ... " at the Potomac River Station.

"We did the right thing and we'd do it again," said Fuller. "Mirant has a responsibility to deliver power to support the reliability of the electric grid, but it must also respect public health concerns. Given the short time we had to find a solution that satisfied the DEQ, we did what any responsible company would do. Now we're looking to the appropriate federal authorities to tell us to either keep the plant shutdown or return it to operation."

Citing the potential for blackouts hitting the Nation's Capital, the District of Columbia Public Service Commission (DCPSC) recently filed an emergency petition and complaint with FERC asking the federal agency to direct Mirant Corp. to continue operating the power plant. FERC is now reviewing comments filed in response to the DCPSC petition.

Mirant on Thursday said that it believes it acted with an abundance of caution by taking a series of well-communicated steps over a five-day period to reduce, then finally halt power production at the plant on Aug. 24, 2005. "Numerous state and federal authorities were consulted prior to the ramp down of the facility, and each had an opportunity to support keeping it on-line, including PJM Interconnection," the generator said.

Despite a consent order that was supposed to allow for a 90-day period in which the parties would develop solutions to issues raised in the study, the Aug. 19 letter from the DEQ stated that Mirant must take immediate action to ensure protection of human health and the environment in the area surrounding the Potomac River Generating Station, including reducing operations or potentially shutting down the facility. Mirant said it understood the DEQ's requirements, but it was not possible for the company to meet them.

Until Mirant can satisfy the DEQ requirements to meet NAAQS, the plant will remain shut down unless it is required to return to operation by the appropriate federal authority with the ability to order its operation, notwithstanding the DEQ directive, the generator added. "Mirant believes that state and federal authorities must commit themselves to resolving the complicated matters involved, and understand that Mirant is caught between multiple jurisdictions and laws."

In the meantime, the plant remains fully staffed and in a state of operational readiness. Mirant "stands ready to continue discussions with all parties to reach a short- and long-term solution that satisfies NAAQS and returns the plant to operation as soon as possible."

Mirant said that its four plants in the D.C. area, including Potomac River, comply with their operating permit emission limits. "In fact, Maryland's Department of the Environment has said publicly that monitoring shows the company's plants in that state to be 'well within the limits,'" Mirant added.

In its comments filed at FERC in response to the DCPSC petition, Mirant said that if FERC or the U.S. Secretary of Energy directs the generator to restart and operate the plant, such a decision should confirm that FERC or the Secretary of Energy "has the jurisdiction and authority to preempt" the authority of the Virginia DEQ and the requirements of any other federal environmental law or regulation.

Potomac River is a coal-fired power plant, which began operation in 1949 and produces 482 MW of electricity for Washington, D.C. and surrounding communities. It is located in Alexandria, VA, and employs 120 people. PJM Interconnection and Pepco Holdings have identified the plant as a critical component for the reliability of the electric grid in the Washington, D.C. area.

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