Lakeland Electric plans to shut down its coal-burning McIntosh Unit 3 power plant around March 31, more than three years earlier than its previously anticipated fall 2024 closing. The plant closure will affect about 60 jobs, a utility spokeswoman said, noting that laid-off employees will get severance packages and help finding other jobs.
News of the accelerated shut-down date emerged during Monday’s City Commission meeting when representatives of Utility Workers Union of America complained that employees who may be affected were told of the pending closure on Dec. 14, just a week and a half before Christmas.
The decision to target a spring closure was driven by increasingly expensive repairs, declining efficiency and the multi-million-dollar risk of maintaining huge stockpiles of coals should the plant fail, according to Lakeland Electric General Manager Joel Ivy.
The generator is co-owned by Orlando Utilities Commission, which carries a 40% share. A series of problems kept the 38-year-old unit offline from mid-May until the latter part of August, followed by several outages into mid-September.
The repairs cost $5 million, exceeding the anticipated amount by $1 million, Ivy told The Ledger.
“As we progressed this year, it became apparent that the risk was too great to operate the unit for an extended period,” Ivy said.
Once the plant is shuttered, it will take five months to get it into steady state, keeping an unspecified number of employees working full time, utility spokeswoman Cathryn Lacey said.
Lakeland Electric’s remaining power generation relies on natural gas, diesel fuel and solar. Its “NextGen” plan calls for adding five natural gas-powered internal combustion engines, increased solar power, and battery storage by 2024.
The utility expects to finance its expansion by borrowing $150 million, mostly through bonds. It also expects to increase the base rate its customers pay by up to 3.5% by 2023, which Lacey pointed out is less than the rate of inflation.
Bobby Mahoney, special projects manager with the utility workers’ union, told city commissioners Monday that he traveled from Washington, D.C., to address them.
“What I came all the way down here was — the way it was done. You don’t bring out the people 10 days before Christmas, line them up, tell them you’re closing their plant, they’re losing their jobs, especially this year when this all could have been done after the holidays,” he said.
Lacey countered today that Lakeland Electric managers wanted to give employees timely information so they could begin making plans. “We also wanted them to hear it from us before they heard it from any other source,” she said.
Mahoney told commissioners the shutting of the plant because of maintenance and coal costs does not constitute the “catastrophic failure” addressed in the union’s agreement with the city. That issue will be contested in court, he said.
Tim Sajko, a 20-year Lakeland Electric employee and president of the local union, reminded commissioners of some failures at the utility’s other plants and said needed modifications haven’t always been done. He questioned whether future equipment failures might result in higher power bills if McIntosh 3 isn’t available as a backup source.
Ivy told The Ledger that the utility has made calculated decisions on maintenance issues in consultation with the generators’ manufacturers.
City commissioners plan to discuss plans to retire the coal-fired plant when they meet with the rest of the city Utility Committee on Jan. 4.