The recently-announced power plant retirements by American Electric Power (NYSE: AEP) and FirstEnergy (NYSE: FE) were troubling for the coal sector because they involved units “once thought safe,” UBS Investment Research Analyst Julien Dumoulin-Smith said recently.
FirstEnergy’s 1,700-MW ‘supercritical’ Hatfield’s Ferry plant in Pennsylvania is already scrubbed, so it would have involved a “modest” capital expenditure to meet new air emissions needs, Dumoulin-Smith said in a July 15 assessment. That plant, when fully operating, burns about 4 million tons of coal per year.
AEP’s Muskingum River Unit 5 in Ohio had been contemplated for conversion to gas, but the unit failed to clear its $180/MWday bid in a recent auction.
While Muskingum River’s capacity factor had declined to 14% in 2013 from roughly 53% in 2011, Hatfield’s Ferry has remained around 60% of late, according to the UBS analysis.
In other power generation developments, last week Energy Future Holdings (EFH) subsidiary Luminant announced that it would again seasonally mothball 1,070 MW of coal capacity at its Monticello Units 1 and 2 in Texas, citing low power revenues during off-peak months. The units will be brought back online for next summer, Dumoulin-Smith said.
Separately, AES also filed notice to again seasonally mothball its Deepwater plant (138 MW) in Texas. AES Deepwater is fired with petroleum coke.