Photo by M.V. Jantzen on Flickr.

This morning, the City of Alexandria announced an agreement with GenOn Energy that will shut down the Potomac River Generating Station on Alexandria’s waterfront by October 2012.

The closure is an air quality and environmental justice win for the region. The plant had been a significant point source of sulfur dioxide and nitrogen oxide air pollution for the region, according to Bill Skrabak, deputy director of Transportation and Environmental Services for the City of Alexandria. Much of this pollution blew across the Potomac River to Ward 8 and Prince George’s County.

In the longer term, the waterfront site offers redevelopment opportunities. It had not been included in the city’s Waterfront Small Area Plan. On a conference call this morning, city representatives said that they will continue to view the Waterfront Plan and potential redevelopment of the power plant as “discrete, separate issues.”

The American Clean Skies Foundation, an advocate for closing the plant, released a plan for redeveloping the site several weeks ago as discussions heated up about a potential closure.

Potomac River Green plan.

The closure could also help the Mount Vernon Trail. The Clean Skies plan, called Potomac River Green, includes moving the MVT out of the cage along the river and onto a greenway along Slater’s Lane, a second trail on Dangerfield Island, connections along the extended street grid, and a bike station near a new water taxi pier.

The plant has become both less critical to the region’s energy needs and more expensive to GenOn as a result of pollution reduction agreements with the City of Alexandria. In 2005, additional power lines were installed under the Potomac River to improve reliability for the region’s electric grid. This reduced the need for the Alexandria plant. Over the past few years, the plant was used less often; there were even entire months over the past year where the generating station was not in use.

In 2008, the operators of the power station signed an agreement with the city that committed GenOn to over $32 million in pollution reduction investments. Funds for these improvements were placed in a city escrow account. The first phase included dust and particulate matter reduction, primarily focused on the coal pile. These improvements cost approximately $2 million and have already been implemented. The remainder of the funds were to be spent on emission recirculation systems that would reduce harmful content emitted from the station’s smokestacks.

As GenOn worked with the city on the more expensive second phase, however, it became clear that closure was a realistic alternative. Before spending money on the improvements, GenOn and the city instead signed the closure agreement. The city will release funds in the escrow account to GenOn, which will in turn close the plant by October 2012. If unforeseen circumstances lead the closure to be delayed until or beyond January 2014, the city will receive a one-time payment of $750,000 from GenOn.

The city will provide tax relief to GenOn after the plant’s closure by taxing only the value of the site’s land and none of its improvements, since the plant will be inactive. This tax relief will last 5 years, starting when the plant closes, and could be renewed for another 5 year term.

There are currently approximately 120 people employed at the GenOn plant; about 40 percent of those jobs are held by Alexandria residents. Calling it an “unexpected announcement,” Alexandria Mayor William D. Euille pledged that the city will work with affected employees as they find new work after the plant’s closure.