FirstEnergy to deactivate two coal plants, convert sites for voltage support

As part of its plan to deactivate six coal-fired power plants due to looming clean-air rules, FirstEnergy (NYSE: FE), along with affiliate American Transmission Systems, applied July 16 at FERC for authorizations to convert two of those sites to synchronous condensers for local voltage support needs.

On Jan. 26, FirstEnergy announced that two of its generation subsidiaries would deactivate a number of generating units at six older, coal-fired power plants located in Ohio, Pennsylvania and Maryland by Sept. 1, 2012. The decision to close the plants was based on the U.S. Environmental Protection Agency’s Mercury and Air Toxics Standards and other environmental regulations. As a result of these new standards and regulations, the older, coal-fired power plants were less likely to be dispatched under current market rules. As announced on Jan. 26, the total capacity of FE GenCo’s plants that will be deactivated is 2,217 MW.

The units to be deactivated by FE GenCo are Bay Shore Units 2-4 in Oregon, Ohio; Eastlake Units 1-5 in Eastlake, Ohio; the Ashtabula plant in Ashtabula, Ohio; and Lake Shore plant in Cleveland, Ohio. FirstEnergy also announced on Jan. 26 the deactivation of an additional 472 MW of generation owned by another generation subsidiary, Allegheny Energy Supply Co. LLC. On Feb. 8, FirstEnergy announced the deactivation of an additional 660 MW of generation owned by its regulated subsidiary, Monongahela Power.

A study performed by PJM following the announcement of the deactivations found reliability concerns as a result of the deactivations, including concerns with continued reliability of the American Transmission Systems (ATSI) transmission system supporting the Cleveland area. It determined that there was a need for numerous transmission upgrades, including additional voltage support in that area. In addition, PJM has requested FirstEnergy to continue to operate Eastlake Units 1-3 and Lakeshore Unit 18, beyond the proposed Sept. 1 deactivation date under Reliability-Must-Run arrangements.

Assets at Lakeshore, Eastlake to be transferred to ATSI

In the July 16 application at FERC, FirstEnergy and ATSI are requesting commission authorization for FE GenCo’s transfer of certain generation assets to ATSI for the purpose of conversion to synchronous condensers to support the ATSI transmission system. This transaction involves the transfer of the power islands and associated property and equipment for Eastlake Units 1-5 and Lakeshore Unit 18. All of the transferred assets will be deactivated by FE GenCo prior to conversion to synchronous condensers by ATSI. The portion of the transferred assets that is necessary for the synchronous condenser conversion and operation and maintenance will be transferred at the assets’ original cost, less accumulated depreciation. The portion of the transferred assets consisting of the remainder of the equipment, fixtures and other contents of the transferred buildings will be transferred at FE GenCo’s net book value at closing, which will be zero.

“ATSI is acquiring the Transferred Assets in order to convert them into synchronous condensers,” said the July 16 filing. “PJM Interconnection, L.L.C. (‘PJM’) and ATSI have determined that the installation of synchronous condensers at the Eastlake and Lakeshore locations is the most cost-effective and expedient means of providing the voltage support that the ATSI transmission system will need in the Cleveland area upon the deactivation of these and other generating units. PJM has directed the installation of the first synchronous condenser at Eastlake Unit 5 with an in-service date of June 1, 2013 to maintain reliability. So that ATSI may complete the conversion of the Eastlake Unit 5 portion of the Transferred Assets by this date, the Applicants respectfully request the Commission to issue an order approving the Transaction by no later than October 15, 2012, to permit closing of the Transaction with respect to Eastlake Unit 5 by October 31, 2012 and the timely completion of the conversion of this unit to a synchronous condenser.”

The PJM analysis identified numerous low voltage violations in the ATSI transmission zone. PJM and ATSI coordinated their efforts and developed a solution to address the voltage violations in the Cleveland area on a long-term basis. That solution includes conversion of the deactivated Eastlake and Lakeshore units to synchronous condensers providing dynamic reactive voltage support with the following in-service dates:

  • Eastlake Unit 5 – June 1, 2013;
  • Eastlake Unit 4 – Dec. 1, 2013;
  • Eastlake Units 1-3 – June 1, 2015; and
  • Lakeshore Unit 18 – June 1, 2015.

ATSI, by the way, is a wholly-owned subsidiary of FirstEnergy Transmission LLC, which is a wholly-owned subsidiary of Allegheny Energy Inc., which in turn is a wholly-owned subsidiary of FirstEnergy.

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.