The West Virginia Public Service Commission will need a lot more information from Monongahela Power and Potomac Edison before it signs off on plans to shut three coal plants as part of a sweeping coal shutdown program announced Feb. 8 by utility parent FirstEnergy (NYSE: FE).
On March 12, the utilities made a sealed informational filing at the commission within a closed annual expanded net energy cost (ENEC) proceeding. They said that FirstEnergy plans to close the three plants -Albright, Rivesville and Willow Island – by Sept. 1.
Mon Power said it made the sealed filing because it recognized the impact of the announced plant closures, which will affect approximately 105 employees in West Virginia, and because of the requirement in the ENEC proceeding to file a resource plan with the commission as a closed entry docket by Sept. 1.
“In its filing, Mon Power stated that the closure of the three coal-fired generating plants is part of FirstEnergy ’s overall decision to retire older coal generating facilities located in West Virginia, Ohio, Pennsylvania, and Maryland in response to environmental regulations by the U. S. Environmental Protection Agency (EPA) and based on an in-depth study performed by Mon Power regarding unscrubbed regulated coal-fired units that evaluated the conditions of the plants and the impact of environmental regulations on the plants,” said an April 2 commission order.
The commission said that it has some concern that the March 12 filing is intended to provide only preliminary information in contemplation of a resource plan that is scheduled to be filed on or before Sept. 1. Further, the filing does not provide sufficient information. The commission said it would like to evaluate the factors that the companies believe justify a planned deactivation, or retirement, of the generating plants, the options considered and the impact on customers. It also would prefer to make that evaluation prior to a deactivation process that would render the plants inoperable, or that would require extensive expenditures to undo the deactivation process before the plants could be operated either as coal or natural gas plants.
So the commission asked the companies to provide a long list of further information by April 30.
- The commission wants a copy of the notice that was sent to PJM regarding the units. This notice should have included an indication of whether the generating units are being retired or mothballed. The companies need to explain the difference between a unit that is mothballed and a unit that is retired as referenced in the PJM notice requirements.
- Data needs to be filed on the estimated time period that each unit would be out of service if expenditures were to be made to keep the unit in, or return the unit to, operation.
- PJM has issued its Reliability Status Report regarding reliability impacts if the three plants are closed. The commission wants a copy of the Status Report and any replies or intermediate correspondence between Mon Power and PJM regarding the reliability impact. Also, the utilities have to indicate: whether needed transmission upgrades discussed by PJM are going to be made by Mon Power, or some other PJM transmission owner; the cost of the upgrades in total, and on a revenue requirement basis, for Mon Power customers; and whether the cost of the necessary upgrades was factored into the cost analyses regarding closing the plants.
- The commission wants an explanation why it was reasonable to schedule the deactivation of the three plants in order to abrogate the 2012/2013 through 2014/2015 delivery year capacity obligations via PJM’s RPM auction process.
- The utilities need to explain and quantify for each plant (by estimate if necessary) the gross amount that would be received, and the net effect on income, if the next two years capacity obligations to PJM included the West Virginia plants scheduled for retirement.
- The utilities indicated that consideration of repowering has not yet been made. The commission wants an explanation of why. “Explain if the feasibility of conversion to natural gas or other fuel sources was part of the initial decision making process before announcing retirement of the plants,” the order said. “If it was not, please explain why gas conversion was not considered at that time?”
“In the meantime, we expect Monongahela Power Company to not undertake any retirement activities that would render the three West Virginia generation plants inoperable or that would require extensive additional expenditures to restore or repower the plants,” said the commission order about what the companies can do pending the resolution of this proceeding.
Mon Power says plants are old and little used
While the March 12 detailed filing was under seal, the utilities did file an initial heads up report with the commission on March 9. Said that filing about the three targeted plants: “The Facilities have a capacity of 660 megawatts (‘MW’), and comprise about three percent of FirstEnergy’ s total regulated and competitive generation portfolio. Recently, the Facilities served mostly as peaking facilities; over the past three years, the Facilities have generated, on average, less than one percent of the electricity produced by FirstEnergy. The [Feb. 8 shutdown ]announcement followed FirstEnergy’s announcement in January 2012 that its competitive generation subsidiaries planned to deactivate six older, coal-fired power plants located in Ohio, Pennsylvania, and Maryland by September 1, 2012 (collectively for purposes of this Filing, the ‘Non-Regulated Facilities’).”
Prior to the announcement, Mon Power finished an extensive study of its older, unscrubbed regulated coal-fired units to evaluate the condition of those units and to determine the potential impact of changes in environmental regulations. It was determined that additional investments to implement EPA’s Mercury and Air Toxics Standards (MATS) and other environmental rules would make these plants even less likely to be dispatched into the PJM wholesale market. As a result, Mon Power decided to deactivate them by Sept. 1.
The March 9 filing described the power plants in question.
- Albright – is a subcritical coal power plant located in Preston County, and was built in 1952. It has a generating capacity of 292 MW and is 100% owned by Mon Power. All three units are equipped with low NOx burners. None of the units is equipped with SO2 controls. Each of the units uses an ESP (electrostatic precipitator) to control particulate matter, and each is equipped with a cooling tower.
- Rivesville – is a subcritical, two-unit plant located in Marion County, and was built in 1919. It has a capacity of 121 MW and is 100% owned by Mon Power. Neither unit has NOx or SO2 controls. Each of the units has an ESP. Neither unit has cooling towers.
- Willow Island – is a two-unit subcritical plant located in Pleasants County, and was built in 1949. It has capacity of 243 MW and is 100% owned by Mon Power. Both units use over fired air (OFA) for NOx control. Neither unit has SO2 controls. Each of the units uses an ESP to control particulates. Neither unit has cooling towers.
“The facilities are quite inefficient as compared with the supercritical facilities in which Mon Power has a full or partial ownership interest, and are particularly inefficient as compared with new baseload generation technologies,” said the March 9 filing. “The heat rates for the facilities range from 11,400 btu/kwh to over 15,000 btu/kwh. By comparison, heat rates for Mon Power’s supercritical stations are typically at or below 10,000 btukwh. New ultra-supercritical coal units would be expected to have heat rates of below 9,000 btukwh, and new natural gas combined cycle units would be expected to have heat rates in the range of 7,000 btdkwh.”
As of March 8, the aggregate year-to-date capacity factor for the three plants was 2.3%. However, the 2012 year-to-date generation is not based on dispatch economics. Albright’s generation has been for station heat, and Willow Island has only been dispatched on a limited basis for short-term congestion relief. Rivesville had not yet been dispatched in 2012. In all cases, 2012 generation at the facilities was uneconomic from a market perspective. These low capacity factors are expected to hover around 1% for 2013 and 2014 if the plants aren’t deactivated, as planned.