Potomac River Green

It would be retired and then demolished. The plant, known as the Potomac River Generating Station (PRGS), dates from the 1940s and, as documented by the City, has long struggled to meet applicable clean air and water laws. In May, for example, the plant was fined $275,000 for a variety of environmental violations and, in July, D.C. Mayor Vincent Gray said the city was concerned about the impact of SO2 and other pollutants on city residents.  The PRGS now operates at less than 20% of its capacity and may face additional economic challenges to meet the stricter pollution controls recently proposed by the EPA. 

No. The regional power grid, known as PJM (short for Pennsylvania- New Jersey-Maryland), has more than enough electricity from other generating facilities to supply service to Alexandria and Washington D.C. even during peak summer demand.

In September 2007, PJM advised the federal government that the PRGS would no longer be required for reliability purposes once the local Washington D.C. utility, PEPCO, upgraded certain transmission facilities.  Most of these upgrades were completed in 2009.  The D.C. Peoples Counsel also has concluded that the PRGS is not necessary for the supply of electricity to Washington, D.C. 

In addition, in July 2011 a new reliability study, commissioned for Potomac River Green, confirmed that retirement of the PRGS should not raise any reliability issues for Washington, D.C.

The PRGS is a merchant (non-utility) plant which sells power on a wholesale basis to PJM. It has never provided power directly to Alexandria or Washington D.C. residents  -- that is the job of the local electric distribution and service companies, PEPCO (for Washington) and Dominion Virginia Power (for Alexandria).

Because it would make good financial sense for all concerned. The prime riverfront site occupied by the Potomac plant is now worth much more for real estate development than for power generation. If GenON and Pepco help repurpose the site, they are likely to share some of that value.

In addition, GenON would be able to avoid the significant capital expenditures it now faces to continue operating the plant; it might also reduce potential liabilities associated with the plant's closure. As for Pepco, Potomac River Green presents an unanticipated opportunity to profit from the sale of a 1940s property that is now carried at a minimal value on its balance sheet.

Because the PRGS property has been historically treated as a regulated asset, however, it is likely that Pepco’s ratepayers would receive a share of any profits PEPCO earned from selling the property, just as the PSC ordered when the plant was previously sold to Mirant a decade ago.

Costs for the development plan are estimated at to be approximately $450 million.  However, actual costs will depend, in part, on the expenses associated with the property buy-out and site remediation which, at this point, are uncertain. Costs associated with downsizing and/or relocating the substation which is part of Pepco’s local transmission network must also be factored in.

Like other large urban development projects, Potomac River Green will be constructed in phases. Following demolition of the power station, the first phase will likely include the new riverfront park and a number of residential units. The clean enterprise center, museum, commercial space, retail establishments and restaurants would likely be added in a second phase. Additional details can be found in the PRG report.

As noted, Potomac River Green will create hundreds of new jobs; much needed recreation space; new restaurants; a "green" community center; approximately 600 sustainable in-town housing units; and provide a $27 million dollar plus boost in city and state taxes. Potomac River Green will also inject over $1.5 billion of new spending into the regional economy. 

These and other benefits are detailed in the economic development report that RKG Associates completed in June 2011 for Potomac River Green.

The energy center would provide a focus for R&D, investment and commercialization of alternative energy technologies in the Washington D.C. area. The U.S. Department of Energy’s Advanced Research Projects Agency (ARPA-E), the Pentagon, local power companies, consulting companies, smart grid businesses and venture capital firms already employ hundreds of area residents who are involved in building America’s next generation electricity systems. The new center would provide the opportunity for greater collaboration and growth, creating a shared space to incubate new businesses.

Enhancing America’s energy choices and security is one of the defining challenges of our age, and the Washington area is already deeply involved, both on the public and private side. As yet, however, there is no central geographic focus for these activities. Potomac River Green could provide that focus.

Despite its limited operation, in recent years, the Potomac plant burned approximately 400,000 tons of coal annually -- enough to fill a freight train that is over seven miles long. Much of the coal comes from surface mining in Appalachia, which can have a devastating impact on local watersheds and wildlife.

Burning all this coal also generates a lot of air pollution, even taking into account the emission controls now installed at the plant. Based on EPA data, in 2010, the PRGS emitted 1,417 tons of SO2 and 1,451 tons of NOx, which contribute to acid rain and harmful ozone levels, as well as over 60 tons of fine particulate matter, mercury and other toxic metals which are associated with asthma, lung diseases and heart attacks.

Epidemiological Studies have shown that cardio vascular and cancer deaths are strongly correlated with dirty air, especially higher concentrations of small particulate matter (PM2.5).  Based on these studies, The Clean Air Task Force’s September 2010 report, “The Toll from Coal: An Updated Assessment of Death and Disease from America’s Dirtiest Energy Source,” estimated the PM2.5-related benefits of reducing emissions from coal plants.  Their updated report estimated that over 5 years, the emissions generated at the Potomac plant might have lead to over 175 premature deaths, as well as hundreds of heart attacks and severe asthma incidents.  Closing the plant, thus, is likely to save lives, reduce chronic illnesses in the community and avoid numerous hospital admissions.

The City of Alexandria has already begun to talk with GenOn about the future of the Potomac plant. Earlier this year, GenOn also told its stockholders that the company expects to retire some plants it owns rather than make significant additional capital expenditures to meet new pollution controls.  Hence, we expect that during the next year GenOn (and PEPCO) will consider a timetable for decommissioning the Potomac plant and remediating the site.