OAL PLANT
^COMMISSIONING
FINANCING
CLEANUP AND
REDEVELOPMENT
Understanding the
anticipated costs for all
phases of redevelopment
is an important aspect of
a community revitalization
plan. Several financial
mechanisms may be
available to support
different phases of the
assessment, cleanup and
redevelopment process.
Many coal-fired power plants are expected
to close in the coming years. Coal plant
communities are faced with potentially long-term
job and tax revenue loss, legacy environmental
contamination and the need for new economic
opportunities.
EPA's Brownfields Program empowers states, communities and other
stakeholders to work together to assess, safely clean up and sustainably
reuse brownfields. The revitalization of brownfields properties, including
former power plants, can create benefits for communities.
Understanding the costs associated with the decommissioning,
remediation and redevelopment planning for a former power plant is
an important aspect of a community revitalization plan. Depending
on the community's vision for the property's end use, the costs of
decommissioning, demolition, remediation and redevelopment can be
substantial. With well-estimated project costs, a project team and the
community can better identify the best potential funding sources for
meeting environmental cleanup challenges. In addition, a good sense
of potential project costs will inform decision-making at each phase of
the project. Although costs may appear to be prohibitive at first, several
financial mechanisms may be available to support different phases of
the assessment, cleanup and redevelopment process.
EPA prepared this fact sheet to help communities that may be affected
by the closure of coal-fired power plants. Fact sheets covering
stakeholder identification and facilitation and plant decommissioning,
as well as remediation and redevelopment, are also available.
STAKEHOLDER INVOLVEMENT THROUGHOUT
Decommissioning
Planning grants for
stakeholder teams.
Economic and
social analysis.
Tax increment funding.
Job training grants
for remediation.
Brownfields
Assessment grants.
Infrastructure grants.
Brownfields
Cleanup grants.
Underground Storage
Tank Cleanup funds.
Redevelopment
Job training grants
for workers at
redevelopment site.
Energy efficiency and
renewable energy grants.
r/EFft
United States
Environmental Protection
Agency
Coal Plant Decommissioning
Financing Cleanup and Redevelopment
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Financing Redevelopment Projects
During the planning phase, project owners and stakeholders estimate
project costs to determine funding needs for the project. Different
funding mechanisms may be needed for planning, decommissioning and
demolition, remediation, site construction, and operations during reuse.
The reuse plan, developed early in the planning process, should include
cost estimates for each phase of a project. Once cost estimates are
available, the plan should incorporate potential funding sources
and alternatives.
Decommissioning, remediation and redevelopment can be costly
given the size, age and type of operations conducted at each plant.
The table below shows major cost items and significant tasks that are
likely to be encountered during the phases of redevelopment of a
coal-fired power plant.
Decommissioning
• Closure planning, including
safety engineering survey
and asset inventory; legal
notices
• Equipment shutdown,
cleaning and removal or
sale
• Electrical switchyard and
plant power reconfiguration
• Security enhancements
(fences, gates, lighting)
• Removal of surplus coal, oil
and process chemicals
Remediation
• Environmental assessment
• Removal of hazardous
chemicals and wastes
• Permit applications and
closures, remedial plan
development and regulatory
review
• Public outreach and public
involvement
• Closure and cleanup of waste
management units (ash pits or
ponds)
Redevelopment
Demolition or renovation of
existing structures
Infrastructure improvements
or alterations
Architectural planning
Construction of new
buildings and spaces
For some redevelopment activities, financial support may be available as
grants, loans and tax incentives. Support also may be available through
other innovative funding mechanisms. Site owners should determine
what incentives and options are available. Under limited circumstances,
EPA brownfields assessment grants may be available for state, municipal
and tribal organizations if these organizations have access to abandoned
power plants. EPA brownfields cleanup grants are not available to
owners of closed power plants if the owner is a private party or if the
owner is determined to be the party responsible for any contamination
at the property. In most cases, and particularly in cases where
decommissioned power plants (or waste management units located
at these plants) are permitted under the Resource Conservation and
Recovery Act, the private party owner is responsible for implementing
and paying for corrective actions to address environmental contamination
and taking actions to close or decommission all operating units at
the plant.
Coal Plant Decommissioning
Financing Cleanup and Redevelopment
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2015
Brownfields
Federal Programs
The 2015 Brownfields Federal
Programs Guide provides a
comprehensive review of funding
and technical assistance programs
offered by federal agencies that
support brownfields redevelopment.
Potential Federal Funding Sources
The 2015 Brownfields Federal Programs Guide provides a
comprehensive review of funding and technical assistance programs
offered by federal agencies that support brownfields redevelopment.
Some of these programs may be applicable to the redevelopment of
coal-fired power plants. Here is a summary of a few of the most widely
applicable programs.
EPA Brownfields Program Grants- EPA's Brownfields Program
provides direct funding and revolving loans for the assessment and
cleanup of brownfields on an annual competitive basis. Area-wide
planning grants are available to communities to research, plan and
develop implementation strategies for an area affected by one or more
brownfields. Environmental job training grants and technical assistance
are also available through the Brownfields Program. EPA brownfields
grants have eligibility limitations that may restrict their applicability to
privately owned power plants. In addition, brownfields cleanup grants
and loans from Brownfields Revolving Loan Fund grants have cost-share
requirements. For example, Revolving Loan Fund grant recipients must
provide a 20 percent match of the total funds awarded.
U.S. Department of Housing and Urban Development (HUD)
Programs- State and local governments can use HDD's Community
Development Block Grant and Section 108 Loan Guarantee to fund
brownfields redevelopment. Redevelopment projects generally must use
at least 70 percent of the funding to benefit low- and moderate-income
individuals, which may restrict some commercial reuse.
U.S. Department of Commerce, Economic Development
Administration (EDA) - EDA's role is to foster job creation, attract
private investment and support long-term job development in
economically distressed areas of the country. Grants are available
to support the implementation of economic development strategies
that advance new ideas and creative approaches. EDA grants for
redeveloping power plants require a 100 percent match of the total funds
at the time of application. EDA planning grant funds also require a 100
percent match. However, in both cases, communities that meet EDA's
"distressed" parameters may qualify for a lesser match amount.
U.S. Department of Agriculture (USDA)- USDA seeks to improve
the quality of life in rural America. Grants and technical support are
available under several programs for a wide range of rural development
purposes. Eligibility requirements vary by program, but generally grants
are available for communities with populations less than 25,000. The
U.S. Forest Service provides technical assistance and grants to states
to foster urban reforestation and other projects that will help "green"
brownfields. The agency also offers funding sources for energy efficiency
and renewable energy projects in rural areas.
Coal Plant Decommissioning
Financing Cleanup and Redevelopment
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U.S. Department of the Interior, National Park Service (NPS) - The
Federal Historic Preservation Tax Incentives program encourages private
sector investment in the rehabilitation and reuse of historic buildings.
Buildings and rehabilitation must meet historic eligibility criteria, which
may limit some redevelopment options. The unique architecture in some
electric generation buildings at coal-fired power plants has been the
basis for securing these tax credits.
Internal Revenue Service (IRS) - The IRS' New Markets Tax Credit
provides federal tax credits to attract investment in businesses or
economic development projects in low-income communities. Projects
could include the redevelopment and reuse of coal-fired plants.
Massachusetts Creates Plant
Revitalization Task Force
Recognizing the need to
address community concerns
about several planned
coal plant closures, the
Massachusetts legislature
launched the Plant Revitalization
Task Force in 2012. The
group developed a plan for
redeveloping the Salem Harbor
Power Station, as well as a plan
for decommissioning other coal-
fired power plants that faced
imminent closure throughout
the Commonwealth. The state
provided $100,000 for each of
three reuse studies. The final
report on the Salem Harbor
Power Station site is available at
http://www.salem.com/sites/
salemma/files/uploads/power
plant study final.pdf
State and Local Incentives
Many federal funding programs are administered by states. Additional
funds and incentives may be available from state economic development,
housing, environmental and energy agencies. Regional development
agencies, brownfield redevelopment authorities, land banks, and local
community planning groups are also common sources of funding,
especially during the initial planning stages. Some states have passed
special legislation to focus on the needs of communities facing economic
and environmental challenges from the closure of coal-fired power plants.
Municipal financing options will vary from state to state, but generally
include property or income tax incentives or state and local cost-sharing
mechanisms. Various combinations of public/private ownership also can
help finance the project, such as when municipal owners attract private
investors to redevelop a site.
Tax increment financing (TIF), which is authorized by states, can help
municipalities cover upfront cleanup and infrastructure costs. However,
TIFs have a wide range of eligibility requirements, some prohibiting
financing of assessment and cleanup costs.
Private Sources of Funding
Commercial and investment funding mechanisms are often used to
finance redevelopment projects. For example, to construct its new
headquarters, the Accident Fund Insurance Company of America
partnered with a local developer, the Christman Company, to redevelop
the Ottawa Street Power Station in Lansing, Michigan. Corporate
sponsorships, grants and contributions also funded the redevelopment
of industrial parcels into open space and museums, and for other public
use. Tapping into new opportunities available through social media,
some communities have used crowdfunding to raise funds for power
plant redevelopment projects.
Program-related investments (PRIs) may also fund the redevelopment
of power plants. PRIs are loans, loan guarantees or equity investments
made by a foundation to support charitable activities. Educational and
research institutions may also contribute to redevelopment by conducting
initial feasibility analyses and reviewing remediation options.
Coal Plant Decommissioning
Financing Cleanup and Redevelopment
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References and Links
EPA's Brownfields Federal Programs Guide is available at
http://www.epa.gov/brownfields/2015-brownfields-federal-prog rams-
guide.
The Council of Development Finance Agencies' online database
of financing options is available at http://www.cdfa.net/cdfa/cdfaweb.
nsf/ordsearch.html.
The Environmental Grantmakers Association, a coalition of more
than 225 foundations supporting environmental activities, funds
redevelopment projects. Find information at https://ega.org.
The Funders' Network has a database of foundations that
support various elements of smart growth. Find information at
https://www.f undersnetwork.org.
EPA Publication #560-F-16-004
Coal Plant Decommissioning
Financing Cleanup and Redevelopment
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