FirstEnergy officially pulling the plug on coal capacity

FirstEnergy Corp. (NYSE:FE) on Jan. 26 was the latest in a wave of U.S. power generators to announce the retirement of thousands of megawatts of coal-fired capacity due to the age of those units combined with pending U.S. Environmental Protection Agency air emissions control programs.

FirstEnergy said that its generation subsidiaries will retire six older coal-fired plants located in Ohio, Pennsylvania and Maryland by Sept. 1 of this year. The decision to close the plants is based on EPA’s Mercury and Air Toxics Standards (MATS), which were announced in December and due to take effect in 2015, and other environmental regulations.

The total capacity of the competitive plants that will be retired is 2,689 MW. Recently, these plants have served mostly as peaking or intermediate facilities, generating, on average, about 10% of the electricity produced by the company over the past three years. The plants to be retired and their locations are: Bay Shore Units 2-4, Oregon, Ohio; Eastlake, Eastlake, Ohio; Ashtabula, Ashtabula, Ohio; Lake Shore, Cleveland, Ohio; Armstrong, Adrian, Pa.; and R. Paul Smith, Williamsport, Md.

“This decision is not in any way a reflection of the fine work done by the employees at the affected plants, but is related to the impact of new environmental rules,” said James Lash, President, FirstEnergy Generation and chief nuclear officer. “We recently completed a comprehensive review of our coal-fired generating plants and determined that additional investments to implement MATS and other environmental rules would make these older plants even less likely to be dispatched under market rules. As a result, it was necessary to retire the plants rather than continue operations.”

The plant retirements are subject to review for reliability impacts, if any, by PJM Interconnection, the regional transmission organization that controls the area where they are located, FirstEnergy noted. R. Paul Smith, in particular, is a small, old plant that had been hanging on lately largely due to transmission system support needs. R. Paul Smith, for that reason, had been given a temporary exemption under the 2006 Maryland Healthy Air Act, which had triggered installation of SO2 scrubbers on several other newer and bigger coal-fired plants in Maryland.

FirstEnergy said it is finalizing MATS compliance plans for its remaining coal-fired units. Since the Clean Air Act became law in 1970, FirstEnergy and its predecessor companies have invested more than $10bn in environmental protection efforts. Since 1990, FirstEnergy has reduced emissions of NOx by more than 76%, SO2 by more than 86% and mercury by about 56%. When the six coal-fired plants are removed from FirstEnergy’s competitive generating fleet, more than 96% of the power provided will come from resources that are non- or low-emitting, including nuclear, hydro, pumped-storage hydro, natural gas and scrubbed coal units. 

FirstEnergy’s 10 electric distribution companies comprise the nation’s largest investor-owned electric system. Its diverse generating fleet features non-emitting nuclear, scrubbed coal, natural gas, and pumped-storage hydro and other renewables, and has a total generating capacity of nearly 23,000 MW. It acquired a number of coal plants, including R. Paul Smith, in a February 2011 takeover of Allegheny Energy.

A number of power generators, including American Electric Power (NYSE:AEP), the Tennessee Valley Authority and Duke Energy (NYSE:DUK), have in the last couple of years announced coal plant retirements. The coal industry has maintained that these plants, like in the case of the FirstEnergy facilities, are relatively small, old and lightly used, with the plants left in action to be run harder and burn more coal to make up for that lost capacity.

FirstEnergy had lately signaled that it was thinking about these retirements. In a November 2011 presentation at an Edison Electric Institute conference, the company said that up for potential retirement were unscrubbed subcritical units of about 1,700 MW of capacity at the “Lake Plants” and another 500 MW of capacity at former Allegheny Energy plants. Lake Plants is a term used to describe plants, like Bay Shore and Eastlake, located along the shores of Lake Erie.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.