Bloomberg News: Coal-Plant Plunge Threatens Billions in Pollution Spend
By Julie Johnsson
“The coal-fired power industry in the U.S. is facing the biggest plunge in asset values in a decade, risking billions of dollars in pollution-control spending by utilities such asExelon Corp. (EXC) (EXC) and American Electric Power Co. (AEP) (AEP)
An indication of how much new emissions rules and cheaper natural gas have hammered the value of coal-burning generation will come when Exelon announces the results of the first big sale of U.S. coal-fired power plants in four years.
Exelon, the largest U.S. power company, may have to take a 40 percent discount for three Maryland plants it’s seeking to sell by the end of August.
Constellation Energy Group, which Exelon bought this year, spent $1 billion on the plants to keep them in compliance with pollution rules.
The transaction may help American Electric, GenOn Energy Inc. (GEN) (GEN) and FirstEnergy Corp. (FE) (FE) determine whether the cost of added pollution controls to keep coal plants operating is worth it.
Before the commodity boom collapsed in 2008, large coal plants typically sold for $1,000 a kilowatt, Daniele Seitz, an independent power industry consultant, said in a phone interview.”
For complete article, see: http://www.businessweek.com/news/2012-06-24/coal-plant-plunge-threatens-billions-in-pollution-spend