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Large Coal Plants Slated to Close in Ohio and Pennsylvania

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Large Coal Plants Slated to Close in Ohio and Pennsylvania

September 18, 2018

FirstEnergy is planning to close its last coal-fired power plants in Pennsylvania and Ohio over the next several years as they struggle to compete against natural gas and subsidized solar and wind plants unless federal aid saves them. FirstEnergy plans to de-activate the 2490-megawatt Bruce Mansfield Power Plant—the largest coal-fired power plant in Pennsylvania—on June 1, 2021. Also, the 1490-megawatt W.H. Sammis power plant in Stratton, Ohio will be deactivated on June 1, 2022, as well as two smaller generating units in Ohio. The plants employ 550 people. According to the company, the plants are being retired because of “a market environment that fails to adequately compensate generators for the resiliency and fuel-security attributes that the plants provide.” Closure of these plants would leave about two dozen coal-fired plants operational in Ohio and Pennsylvania.

Also affected would be the coal mining industry that employs over 5,000 workers in Pennsylvania and 2,800 in Ohio directly. Directly and indirectly, the coal industry employs 33,000 Ohioans. According to the Ohio Coal Association, coal-fired plants provide about 60 percent of the state’s energy.

These are not the only coal plants slated for retirement. For example, AES announced it would likely be forced to close a 360-megawatt Oklahoma coal plant, in the Southwest Power Pool, after Oklahoma Gas & Electric did not extend its power-purchase agreement. The plant employs about 100 workers. It also supports 800 to 1,200 other jobs directly and indirectly and has an annual economic impact of $48 million in its southeast Oklahoma region.

At least 11.4 gigawatts of coal-fired power plant capacity is expected to retire this year in the United States—more than has been retired in a single year since 2015 when 14.7 gigawatts of coal capacity was retired. Another 19.8 gigawatts of coal-fired power plant capacity is scheduled to close between 2018 and 2022. Moody’s Investors Service expects about 35 gigawatts of capacity from coal and nuclear plants to be shut down over the next five years. Since 2010, almost 40 percent of the nation’s coal-fired power capacity has either been shut down or designated for closure. And, over a quarter of our nuclear power plants cannot cover their operating costs, raising the threat of early retirement as well.

FirstEnergy Closure Plans

First Energy filed for Chapter 11 bankruptcy in March, stating that Bruce Mansfield lost $90 million in 2017 and projected a loss of $104 million this year, indicating low-cost natural gas as a cause for the plant’s losses. Because the plants cannot compete in PJM Interconnection’s regional wholesale markets with natural gas and subsidized and mandated renewable energy (wind and solar power), the company announced earlier this year it would also deactivate its three nuclear plants starting in 2020. Davis-Besse, in Oak Harbor, Ohio, would go offline by May 2020, and the company’s Beaver Valley nuclear plant in Shippingport and its Perry plant in Ohio would deactivate by May 2021.

The plant closures are subject to review by PJM, who could offer higher rates temporarily, until new transmission lines are built, if needed, to move additional power to the region. PJM Interconnection, the mid-Atlantic grid where FirstEnergy’s plants are located, will review the company’s plan over the next 90 days to determine if there would be any effects on the grid that require transmission upgrades. A spokesman for PJM Interconnection indicated that the grid had “adequate power supplies and healthy reserves in operation.”

The company has asked for an exemption from PJM’s “must offer” rules for fossil and nuclear plants for the 2022-2023 delivery year and beyond. Under must-offer rules, generating companies in the PJM region are required to make their plants’ capacity available to the grid in regular capacity auctions unless granted an exemption. The auctions are held to secure capacity three years in advance.

Conclusion

Coal and nuclear power plants are finding they cannot compete in wholesale markets with natural gas and wind and solar plants, which are heavily subsidized through state mandates and federal and state tax subsidies. Many U.S. utilities with coal and nuclear plants in their fleet are losing revenue, have filed for bankruptcy protection, and announced closures of their coal and nuclear plants. Coal, once the backbone of the U.S. generating industry, producing over half of the country’s power, is now generating less than a third of it, putting plant workers and miners in unemployment lines.

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This post was originally published at Institute for Energy Research and is reposted here under a CreativeCommons, Non-Commericial 3.0 license.

 


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