Indiana coal plant receiving HB6 subsidies may soon close due to pollution concerns

IKE could be forced to shut down

COLUMBUS, Ohio — An Indiana coal-fired power plant that Ohio ratepayers are paying millions of dollars to subsidize under the notorious House Bill 6 energy law could soon close because the U.S. Environmental Protection Agency is seeking to no longer exempt it from environmental rules.

The U.S. EPA announced Tuesday it has proposed denying a request by the Clifty Creek Power Plant in Madison, Indiana, to continue using unlined surface ponds to hold coal ash, a residual byproduct of burning coal that, if not properly stored, can contaminate groundwater and the air with toxins such as mercury, cadmium, and arsenic.

If the EPA’s proposed decision becomes final, the owners of the Clifty Creek plant told the EPA they would be forced to shut it down, according to the proposed decision.

EPA officials also proposed denying a similar request by the James M. Gavin coal plant in Cheshire, Ohio, as well as a third plant in Iowa. In all three cases, the EPA stated that it denied the extension requests because of concerns with groundwater monitoring and with the proposed basin closure plans.

HB6, signed by Gov. Mike DeWine in 2019, requires millions of ratepayers in Ohio -- as well as several other states -- to pay money through their utility companies to cover debts for Clifty Creek and the Kyger Creek plant in Clifton, Ohio. A recent study by opponents of the coal-plant subsidies found they could cost Ohioans a total of $1.8 billion by 2030, when the subsidies are set to end.

Both plants are operated by the Indiana-Kentucky Electric Corporation, a subsidiary of the Ohio Valley Electric Corporation. OVEC is owned by more than a dozen utility companies, including American Electric Power, Duke Energy, AES Ohio (formerly called Dayton Power & Light), and two subsidiaries of FirstEnergy Corp.

In 2020, federal officials charged then-Ohio House Speaker Larry Householder and four allies with operating a bribery scheme using $60 million in FirstEnergy money to secure the passage of HB6. In response, DeWine signed a partial repeal of the law last March, but the coal-plant subsidies still remain on the books.

The EPA’s coal-ash storage rules were created in 2015, when Barack Obama was president. However, they weren’t enforced until after President Joe Biden took office last year. In all, 57 coal power plants around the country applied for an extension – including OVEC’s Kyger Creek plant, whose request is still under review.

The EPA required coal plants to stop dumping coal ash in unlined basins after April 2021 unless they were approved for an extension. Clifty Creek officials applied for an extension until April 2023 to continue using the plant’s coal-ash basins, to give them time to construct alternative disposal systems.

Officials  has reached out to OVEC for comment on the possible closure of the Clifty Creek plant, which generates up to 1,304 megawatts of power. The EPA stated that Indiana-Kentucky Electric Corporation officials told them that if they had to close the Clifty Creek plant, it could cause “increased and accelerated costs” to them and might “negatively impact” the stability of the regional electric grid and power markets.

The James M. Gavin plant in Cheshire, which is owned by ArcLight Capital Partners and is not subsidized under HB6, would also close if it doesn’t receive an extension until May 2023 to continue using an unlined 57.8-acre pond to impound coal ash, according to the EPA’s proposed denial.

Comments on EPA’s proposed decisions for both the Clifty Creek and Gavin plants are due Feb. 23. If the EPA issues final decisions denying extensions, the owners of the plants will have 135 days to stop putting coal ash in the unlined basins.