Not quite satisfied with Monongahela Power’s reasons for shutting three little-used coal plants – Rivesville, Willow Island and Albright – the West Virginia Public Service Commission is seeking more information before signing off on these shutdowns.
On March 9, Monongahela Power and Potomac Edison, both units of FirstEnergy (NYSE: FE), filed a closed entry informational filing in a shut expanded net energy costs (ENEC) proceeding about a plan to close the three plants by Sept. 1. The commission on April 2 then asked for more information, which was filed by the company on April 30. Then in a May 17 order, the commission asked for additional information, with a deadline of 15 days from the order for it to be filed.
In Question No. 10 of the April 2 order, the commission asked the companies 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 of capacity obligations to PJM included the West Virginia plants scheduled for retirement. The companies did not provide an answer showing the net potential impact on customers of maintaining the plants for the next two years, perhaps because the question was not clearly framed, the commission noted in the May 17 order.
“We want the Companies to explain and quantify for each plant (estimated if necessary) the revenue requirement impact if the plants had been available for capacity receipts over the next two years, net of the minimum annual cost of maintaining the plants in a condition that would have allowed them to receive capacity payments from PJM,” said the follow-up question.
The commission said it does not understand the response to Question No. 12 of the April 2 order. The companies indicate that delaying the availability of the employees at the retiring Mon Power plants would have prevented them from participating in filling the backlog of positions created by a hiring suspension. Yet, in the next sentence, the companies indicated that until the PJM retirement process is complete and final decisions are made, FirstEnergy is unable to execute these plans. “Does this mean that all, or some, of the ‘enhanced separation’ plans and hiring plans described by FirstEnergy have been delayed, or has FirstEnergy proceeded with the plans for all, or some employees?” the commission wrote.
In responding to Question No. 15 of the April 2 order, the companies referred to a “Levelized Cost Model” that was used to evaluate converting Albright to natural gas. The commission now wants the results of the model, including whether the model assumed conversion to a combined cycle combustion turbine plant or simply burning natural gas in a steam plant. If the latter, the companies need to indicate if the model assumed replacement of the boilers and turbines, and if so, why the efficiency of the existing plant had any bearing on the model. The commission also wants the companies to explain and quantify how the cost of converting the plant to a natural gas combined cycle generation plant compares to construction of a similar plant at a greenfield site. “Explain whether a potential conversion to natural gas that may be considered in the future affects the retirement steps (removal of all equipment and structures versus maintaining some equipment and structures) that are planned at Albright, Rivesville or Willow Island,” said the commission.
PSC wants to know if life extension allowed under EPA’s CO2 rule
The West Virginia commission also wants to know more about how a recent U.S. Environmental Protection Agency proposal covering CO2 emissions from new power plants, which would set a CO2 limit at about the level of a gas-fired power plant, affects the companies’ planning process. The commission said the companies may have misunderstood an April 2 question by the commission on this point.
“The Commission is aware that there may be few, if any, new coal-fired power plants built in the near future, or, if there are, new coal-fired power plants will be more expensive to build and operate if the carbon emission limitation proposed by the EPA becomes law,” the commission noted. “We were specifically asking for the Companies’ evaluation of whether, considering the proposed EPA Regulations, the life of an existing coal plant could be extended by the installation of new, more efficient, equipment without being subject to the carbon emission limitations that would be applicable to new coal plants. If such life extension would allow an existing plant to operate without the carbon restrictions, would there be merit in keeping existing coal plants at least on a standby or ‘mothballed’ status to enable the future retrofitting of the plant that would allow it to burn coal more efficiently, but without the added expenditure for carbon capture and storage.”
The commission added on this point: “Furthermore, we would like to know whether the Companies’ plans for the deactivation of the three plants would remove them from the pool of ‘existing’ coal-fired plants and unavailable for future retrofitting without carbon emission restrictions that might become applicable to new coal-fired power plants. If so, have the Companies considered any alternative plans to maintain the availability of the plants as ‘existing plants’ until the federal regulations regarding the treatment of new and/or existing coal-fired power plants is clearer.”
Companies argued that the plants are no longer needed
Albright, Rivesville and Willow Island aren’t needed anymore and there should be no significant generation capacity loss or transmission system impacts from shutting them down, said the companies in the April 30 filing with the commission.
“Prior to announcing the deactivation of three subcritical coal-fired power plants, Mon Power completed an extensive study of its older, unscrubbed regulated coal-fired units to evaluate the condition of those units and to determine the expected impact of significant changes in environmental regulations,” they told the commission in the April 30 filing. “The study showed that additional needed capital investments, particularly to comply with Mercury and Air Toxics Standards (‘MATS’) Rules and other environment rules, would not be cost effective and would make it even less likely that these plants would be dispatched into the PJM wholesale power market.”
These plants are:
Albright – is a subcritical coal power plant located in Preston County that was built in 1952. It has a capacity of 292 MW and is 100% owned by Mon Power.
Rivesville – is a subcritical, two-unit plant located in Marion County that was built in 1919. It has a capacity of 121 MW and is 100% owned by Mon Power.
Willow Island – is a two-unit subcritical plant located in Pleasants County that was built in 1949. It has capacity of 243 MW and is 100% owned by Mon Power.