The West Virginia Public Service Commission has deferred until this fall a review of a FirstEnergy (NYSE: FE) plan to deactivate three coal-fired power plants, but has granted the company preliminary approval to shut the plants in the meantime.
Earlier this year, in a shut Expanded Net Energy Cost (ENEC) case, Monongahela Power and Potomac Edison filed with the commission an advisory about the plan to deactivate the old Albright, Willow Island and Rivesville coal plants on Sept. 1 of this year, due to the age of the plants, their current disuse and the need to install expensive new environmental controls under new U.S. Environmental Protection Agency mandates. The commission in a July 13 order said it considers the informational filing as a pre-filing of a Resource Plan to be filed by Sept. 1 in the next ENEC case of Mon Power and Potomac Edison, dba Allegheny Power. These companies are subsidiaries of FirstEnergy.
Under a Joint Stipulation approved in the 2011 ENEC case, the companies were required to develop a Resource Plan to be filed as a closed entry in the case on or before Sept. 1. The Resource Plan is to compare projected peak demands with current and planned capacity resources to assess the sufficiency of future capacity resources to meet future demand. The Resource Plan was also required to consider future energy requirements and the availability of supply-side and demand-side resources, and market purchases of capacity.
On March 9, as a closed entry filing, Mon Power and Potomac Edison filed an informational filing regarding the decision of the companies and parent FirstEnergy to close three coal-fired generating facilities in West Virginia that are wholly owned by Mon Power: Albright, located in Albright, Preston County; Willow Island, located near Belmont, Pleasants County; and Rivesville, located in Rivesville, Marion County. The companies filed the closed entry filing as preliminary information in advance of the Sept. 1 Resource Plan.
“In its filing, Mon Power and PE stated that the closure of the three coal-fired generating plants is part of FirstEnergy’s overall decision to retire older coal generating facilities in West Virginia in response to the finalization of environmental regulations by the EPA of the Mercury and Air Toxic Standards Rule (MATS) and other environmental regulations,” the commission noted in the July 13 decision. “Based on a study performed by Mon Power of its older unscrubbed regulated coal-fired units to evaluate the conditions of the plants and the impact of environmental regulations on the plants, the Companies state that it was ‘[d]etermined that additional investments to implement MATS and other environmental rules would make these plants even less likely to be dispatched into the PJM wholesale market.’ Accordingly, the Companies decided to deactivate the facilities by September 1, 2012, rather than continue operations at the plants.”
The companies also stated that the older plant equipment hurts the facilities’ heat rates, costs of production, and economic dispatch into the PJM market. The companies noted that the three older subcritical plants operate only during peak demand and generate a minimal amount of electricity.
Mon Power and PE told the commission the decision to close the plants is part of FirstEnergy’s move to deactivate similar subcritical plants in other states and that competitive generators across the region have made similar decisions. The FirstEnergy companies stated that while they did not believe the commission had explicit jurisdiction over the specific plant closures, upon review of the information provided by the companies, the commission would be satisfied that the companies made the best decision possible under the new federal air requirements.
Commission will look at issues further in Resource Plan review
“At this juncture, the Commission is satisfied with the information filed prior to the filing of the Resource Plan and with the reasonableness of the Companies’ decision to deactivate the three subcritical plants,” the commission said. “The Companies’ filings indicate the decision to close the plants is reasonable given the condition of the plants, expected dispatch into the PJM wholesale market, the cost to install new pollution control equipment or retrofit the plants in light of the new MATS rules. The Commission does not oppose the Companies’ plan to deactivate the three plants.”
The commission said it will continue to review the information provided by the companies about the plant closures as part the Resource Plan review. Upon the filing of the Resource Plan, the commission intends to follow the procedure recommended in the Joint Stipulation and will reopen this case for the limited and exclusive purposes of permitting discovery by the parties on the Resource Plan and allowing the parties to file comments on the Resource Plan.
The commission added: “Based on a review of the Companies’ informational filings, it is reasonable to authorize the Companies to proceed with plans to deactivate the three subcritical plants located at Albright, Willow Island, and Rivesville, West Virginia.” The PSC will continue to review the FirstEnergy plans.
The commission on April 2 had told the companies to refrain from undertaking any retirement activities that would render the plants inoperable or that would require extensive additional expenditures to restore or repower the plants prior to commission review of the information and until further commission order. That standstill order was rescinded by the commission in its July 13 order.
The plants are:
Albright – is a subcritical coal plant that was built in 1952 and has a capacity of 292 MW. 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 that was built in 1919 and has a capacity of 121 MW. 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 that was built in 1949 and has a capacity of 243 MW. Both units use over fired air (OFA) for NOx control. Neither unit has SO2 controls. Each of the units uses an ESP and neither unit has a cooling tower.