PERU – A century-old coal-fired power plant in Peru is set to be demolished after the city-run facility was permanently decommissioned last year.
The Peru Utility Board last week approved a $2.84-million contract for the immediate demolition of the building, parts of which were constructed in 1911 at the site located at 335 E. Canal St. along the Wabash River.
The move comes after the utility board voted last year to take steps to permanently shutter the plant.
The facility had stopped producing electricity more than three years ago after officials said it was too expensive to update the plant to comply with more stringent rules from the Environmental Protection Agency regulating air emissions.
Peru Utilities General Manager Joe Pandy said the demolition contract was awarded to National Salvage and Service Corp., a company based in Bloomington, which specializes in tearing down industrial sites such as power plants and bridges.
The company now has 18 months to complete the demolition, which will remove all the structures and dig out the foundation, as well as ensure the site is free from contaminants such as oil, chemicals and asbestos.
Pandy said the goal of the project is to completely rehabilitate the property to ensure it can be redeveloped as a commercial or recreational site.
“Once we’re finished, it’s going to be just like having green earth to work with,” he said.
Before approving the demolition, the utility board had considered only shuttering the plant and leaving it standing.
However, that option was determined to be too expensive and create too much liability for the city, said Utility Board Chairman Stan Akers. According to a study commissioned by the utility, the annual cost to mothball the plant was estimated at $140,000 a year.
“Your first instinct is this is to think, ‘This plant has been around forever and we don’t want to tear it down,’” Akers said. “You hate to see these old buildings disappear. But we went through every possibility to save the building, but there was nothing that made sense. To maintain the building and have no use for it is nonsensical.”
Pandy agreed.
“At some point it becomes a liability, and the studies showed it was going to be an ongoing liability far into the future,” he said. “It’s a business decision. It’s more cost effective to remove it than try to preserve it.”
The coal plant was the sole supplier of electricity in Peru until the 1970s, when the utility also began to purchase power from Duke Energy, according to the former Peru Utility General Manager Roger Merriman.
He said in a previous interview the city began purchasing power in 1983 from the Indiana Municipal Power Agency, which is its current supplier, but continued to produce its own electricity to sell to the IMPA.
The plant was most recently used to generate electricity that was sold on the market, with the profits going to the city’s utility.
Merriman said the facility stopped doing that three years ago after a sharp decline in energy prices, and hasn’t produced any electricity since then.
The closing of the Peru facility is part of a national trend of coal plants going off the grid as the EPA tightens environmental regulations on air pollution.
In 2002, 633 coal plants produced electricity in the U.S., according to a report issued last year by the Energy Information Agency. By 2013, 115 of those plants had closed, the study said.
Merriman said many of those plants were in towns and small cities like Peru, which can’t afford to upgrade to meet new regulations like the ones unveiled earlier this year by President Barack Obama in his Clean Power Plan.
The plan aims to cut pollution that leads to soot and smog by over 25 percent by 2030. According to the EPA, power plants are the largest source of carbon pollution in the U.S., accounting for roughly one-third of all domestic greenhouse gas emissions.
In Peru’s case, Merriman said, the coal plant was using technology from the 1940s and 1950s to produce electricity.
“Our units are so inefficient that there’s no way we could have complied with these regulations,” he said.