The William Crawford Gorgas Electric Generating Plant near Parrish is set to be retired in April, but Alabama Power customers will be repaying about $740 million in costs related to the Walker County coal power plant long after it closes, according to documents the company filed with the Securities and Exchange Commission.

Alabama Power’s parent group, Southern Company, disclosed in its latest public 10-K filing that “approximately $740 million of net investment costs [from Plant Gorgas] will be transferred to a regulatory asset at the retirement date and recovered over the affected units’ remaining useful lives.” That will allow Alabama Power to recover the costs of investments it made in the coal-fired power plant, plus a profit margin set by the Alabama Public Service Commission, from customers through their electric bills.

If divided evenly among Alabama Power’s estimated 1.48 million residential, business and industrial customers, that debt works out to about $500 for each customer.

Among those costs, Alabama Power spent more than $400 million at the plant since 2010 on environmental upgrades, in efforts to keep the plant -- which has been in operation since 1917 -- in compliance with tightening federal environmental laws, including the U.S. Environmental Protection Agency's MATS (mercury and air toxics standards) rule, meant to limit the amount of mercury emitted to the air at coal-fired power plants.

Critics like the Southern Alliance for Clean Energy – an environmental group that pointed out the $740 million -- said the power company was spending too much money on keeping old coal plants in operation rather than exploring other options, such as converting to natural gas.

“A number of people, including us, wanted Plant Gorgas to be retired back in 2015 rather than investing $300 million to keep the plant going,” said John Wilson, research director for the SACE. “And now Alabama Power customers will be paying for this, for these past years of continued investments in that plant.

"And that really could have been avoided. Maybe not the whole $700 million could have been avoided, but certainly somewhere between $300 and $400 million could have been avoided if they had taken earlier action to recognize that this plant was not economical in the long run."

Some of those upgrades included a $375 million “baghouse” at the plant, a massive system of air filters meant to remove mercury from the plant’s air emissions, which was scheduled for completion by the end of 2015. According to Alabama Power in 2015, that baghouse contained more than 20,000 filter bags, each 26 feet long, housed in a facility that is 11 stories tall and takes up as much space as three football fields. That baghouse will have been operational for about three and a half years when the plant is permanently closed in April.

AL.com presented Alabama Power with a list of questions about environmental upgrades to the plant and the cost and timing of those upgrades, whether the utility had considered converting the plant to natural gas before these major investments were made. AL.com also asked for more details concerning the $300 million in additional upgrades the company said would be needed to make Plant Gorgas compliant with the latest federal environmental mandates even after the baghouse was finished.

Alabama Power spokesman Michael Sznajderman issued the following statement in response:

"Utilities have long planning horizons for the assets they invest in. We considered all viable alternatives before making this decision. Alabama Power’s ability to provide safe, reliable electric service to customers will not be affected.

“The company regularly examines its generation fleet to determine how to meet the future needs of customers, and this retirement will factor into that process. With the retirement of Gorgas, the remaining net investments are recoverable in this case.”

The company blamed costs associated with environmental mandates when announcing the plant would close. The company has not announced plans to add any new plants or facilities due to the closing, and has said that it does not anticipate any layoffs among the employees at the plant.

Publicly available documents did not specify what costs made up the $740 million, nor how long rate payers would be paying off the amount.

Wilson, who has a masters degree in public policy from Harvard’s John F. Kennedy School of Government and leads SACE’s work on utility rate issues, said it’s not unusual for those costs to be spread out over 20 years or more.

SACE executive director Stephen Smith said the Alabama Public Service Commission, should have given more scrutiny as to whether the upgrades were a wise investment.

“This is another wakeup call showing the PSC can be doing more on behalf of everyday Alabamians to provide checks and balances on Alabama Power,” Smith said. “If the Alabama PSC and Alabama Power had been more up front about the market dynamics pulling back from coal we would have avoided these sunk costs and impacts to ratepayers.”