On April 22, American Electric Power announced that it would close the Rockport Plant in southwest Indiana by 2028, making the plant the only one of the 10 largest in the country that is scheduled to completely shut down before 2030.

Eight of the top 10 coal-fired plants have no firm retirement dates, even though President Joe Biden has talked about wanting to see a phaseout of fossil fuel-generated electricity by 2035, and most of the plants are owned by companies that have said they are aiming for net-zero emissions by 2050.

These gargantuan plants, including one with a smokestack about as tall as the Eiffel Tower, remain active for a host of reasons that show market forces alone are sometimes not enough to convince energy companies to shut down assets that they may view as their flagships. Some of the plants are hanging on to life with help from state regulatory systems that allow plant owners to rack up guaranteed returns, slowing the transition to cheaper and less-polluting electricity sources.

“You have a disproportionate share of these coal plants owned by vertical monopolies who are largely insulated from market forces,” said Joe Daniel, a senior energy analyst for the Union of Concerned Scientists.

But it would be wrong to say that all the plants are unable to compete. Some, like the W.A. Parish Generating Station near Houston, Texas, owned by NRG Energy, remain viable because of economies of scale and relatively low fuel costs. These plants could operate for decades, unless there is a change in government policy to make plant owners cover some of the costs tied to their emissions.

A carbon price would hit coal-fired plants the hardest because coal has more than double the emissions of natural gas per unit of electricity generated from burning the fuels. Nuclear power and renewables, like solar and wind, have zero emissions.

“We need regulation on carbon pollution because carbon pollution is really hurting our economy and hurting people’s livelihoods, and without that the economics of coal mean some plants shut down, but certainly not all of them,” said Catie Hausman, a University of Michigan professor whose research focuses on energy and climate policy.

While some of the largest coal plants may be able to hold on indefinitely, coal power as a whole is rapidly declining.

The country now has 217 gigawatts of capacity from coal-fired power plants, down about 30 percent since 2011, according to the Energy Information Administration. Hundreds of plants, mostly the smallest and oldest, have closed.

The remaining plants are operating less often than before. Coal-fired power plants had an average “capacity factor” in 2011 of 63 percent, which means they were running at just shy of two-thirds of the maximum that is technically possible. The average fell to 40 percent last year, with many plants sitting idle for much of the time as their owners chose to use less expensive options.

Of the 10 largest coal plants, ranked by generating capacity, the one that used the least, with a capacity factor of 18 percent, is Rockport, the plant that just got a retirement date.

Costly and Tied Up in the Courts

AEP announced its plans to close Rockport as part of its quarterly earnings release, which happened to fall on Earth Day.

Rockport, with summer capacity of 2,600 megawatts, consists of two 1,300-megawatt generating units, one owned by AEP and the other owned by Wilmington Trust Co., a financial services company.

AEP said in 2019 that it was going to close its half of the plant in 2028. The latest news was that the company had an agreement to purchase the other half and close it in 2028, pending approval from regulators.

Rockport is a landmark, sitting near a bend in the Ohio River at the Kentucky border and visible for miles around. Its smokestack is 1,038 feet tall, and has been described as one of the tallest in the world. That is nearly double the height of the Statue of Liberty and about the same height as the Eiffel Tower.

Nick Akins, AEP’s chairman, president and CEO, said in a conference call that the company may close the plant even sooner, depending on market conditions.

The Rockport plant is part of a long-running legal case that dates back to a 1999 complaint filed by the U.S. Environmental Protection Agency over alleged violations of the Clean Air Act. The case led to a 2007 agreement that included the EPA, environmental groups and Northeastern state governments in which AEP said it would take a series of steps to reduce emissions. By closing the plant, AEP won’t have to spend more than $1 billion on pollution controls that a federal district court judge was requiring.

In addition to the legal issues, Rockport is the most expensive to run of the 10 largest coal plants, with a cost of $61 per megawatt-hour of electricity generation, according to an analysis of U.S. coal-fired power plants to be released this week by the think tank Energy Innovation. The cost is nearly double what a utility would pay for wind or solar in Indiana, according to Eric Gimon, a senior fellow at Energy Innovation and a co-author of the report.

AEP is “probably not making much money off of that thing,” he said.

One of the people relieved to see the plant get a retirement date is Wendy Bredhold, who lives near the plant, in Evansville, Indiana, and works on the staff of the Sierra Club’s Beyond Coal Campaign for Indiana and Kentucky.

“As a resident of southwest Indiana raising my child here, I was initially elated because this is the first full announcement of one of the super-polluters [closing],” she said.

But she said she has mixed feelings about the 2028 timing because she would like to see it close even sooner.

Bredhold’s part of Indiana is home to a cluster of heavily polluting coal plants, including another that is among the 10 largest, Duke Energy’s Gibson Station plant.

Duke has said it is planning to close one of the five generating units at the Gibson plant in 2026, with the rest remaining open until 2034 or 2038. But those plans are not final and could change in the near future. Duke is now working on an update to its long-term plan for Indiana power plants, which will be released this fall.

Gibson’s generation cost is $41 per megawatt-hour, according to Energy Innovation.

Rockport and Gibson, which are about 65 miles apart, share the distinction of being the only two of the 10 largest coal-fired power plants to have retirement dates.

Ohio-based AEP has one other plant among the top 10, the John Amos Plant in West Virginia, which has a generation cost of $39 per megawatt-hour.

Scott Blake, an AEP spokesman, said the company does not have a firm schedule for retiring the Amos plant. In regulatory filings, AEP has listed a potential retirement year of 2040 for the plant, but this is not a firm plan.

“When the plants stop operating will be driven by market forces and environmental regulation,” he said.

Operating Costs Vary for Big Plants

Atlanta-based Southern Company owns three of the top 10 plants: the Plant Scherer and Plant Bowen in Georgia, and the James H. Miller Jr. Electric Generating Plant in Alabama. The company has no plans to retire any of the three.

While the plants may appear similar, there are some big differences in their financial performance, Gimon said.

In the report, he and his co-authors said the Scherer and Bowen plants each have high costs, with $56 per megawatt-hour for Scherer and $54 per megawatt-hour for Bowen,  which is substantially more than the cost of electricity from plants that run on natural gas, wind or solar. The dollar figures include publicly reported information from the companies, along with estimates from the report’s authors to fill in the blanks of what the companies don’t report.

Meanwhile, the Miller plant has some of the lowest costs, with $29 per megawatt-hour.

The large gap is because of several factors, including maintenance expenses and the price of coal, which can vary a lot even for plants owned by the same company.

Gimon views the high costs of the plants in Georgia as a sign of poor regulation. The state allows the utility to charge customers for operating the plants, plus an agreed-upon level of profit. This system doesn’t work if the regulators are not demanding that utilities effectively manage their costs and justify their profits, he said.

“How the hell are regulators letting these plants stick around?” Gimon asked.

Contacted for a response, Tom Krause, a spokesman for the Georgia Public Service Commission, said that the Scherer and Bowen plants “are currently competitive” and that abruptly closing them “would put a massive strain on ratepayers.”

Demetrius Sherrod, a Southern Company spokesman, said his company’s subsidiary, Georgia Power, has worked with regulators to manage a diverse mix of power plants and determine when plants should close. The company will file its next long-term plan for its power plants in January.

“Georgia Power will continue to operate its coal generating plants as long as they provide economic benefits for customers,” he said.

The Monroe Power Plant in Michigan, owned by DTE Energy, also has its profit guaranteed by state regulators, but its costs, $32 per megawatt-hour, are low compared to many of the other large coal plants. In regulatory filings, DTE has listed a potential retirement year of 2040 for the plant, but also said that this is subject to change.

An Obvious Policy Solution

The other plants in the top 10 include several that have relatively low costs and could continue to operate for a long time, if profit was the only consideration.

Two of the plants, W.A. Parish in Texas ($29 per megawatt-hour) and the Gavin Power Plant in Ohio ($34 per megawatt-hour), are in markets where electricity generators compete on price, as opposed to having profits guaranteed by state regulators. The Gavin plant, which is owned by Lightstone Generation, a joint venture of financial firms Blackstone and ArcLight, has the benefit of being in a multi-state grid region that pays plants for agreeing to be available for use at all times. These payments are probably enough to make the difference between a plant making money and losing money, Gimon said.

Another plant with relatively low costs ($30 per megawatt-hour) is the Cumberland Fossil Plant in Tennessee, which is owned by the federally run Tennessee Valley Authority. The plant has no retirement date, but TVA’s president said last week that the company is preparing to phase out its coal-fired power plants by 2035. TVA has not released additional details and would need to go through an approval process with its board to set a retirement schedule.

For advocates and researchers who would like to see all the coal plants close, one of the most obvious policy solutions, a price on carbon emissions, is also one of the most politically fraught.

Without some method to make power plants cover the costs of their emissions, advocates are left to make their case about each plant in state regulatory cases and in shareholder pressure campaigns.

Their case is largely economic, and they can point to a long-term trend that is going in the direction of clean energy.

“Coal keeps getting more expensive and clean energy keeps getting cheaper,” said Daniel of the Union of Concerned Scientists.

But it remains frustrating for him and many others that the reality of climate change is not enough to convince leaders to quickly close the door on coal power.