Ohio, New England grappling with growing dominance of natural gas

New England is losing its non-gas resources to retirements and this is a worrisome trend for ISO-New England (ISO-NE) said President and CEO Gordon van Welie on March 26.

Meanwhile, Commissioner Asim Haque of the Public Utilities Commission of Ohio (PUCO) said coal retirements are a reality and he won’t count upon proposed combined-cycle gas plants until they are actually built.

Both van Welie and Haque offered their observations on the growing dominance of natural gas-fueled generation during an event organized by ICF International at the National Press Club in Washington, D.C.

“Look at February, we were leaning on Brayton Point very heavily,” van Welie said. Brayton Point, located in Massachusetts, is comprised of four units (coal and oil) that together can generate more than 1,500 MW. Dynegy (NYSE:DYN) said last summer that it is buying the facility.

The Brayton Point station is scheduled to retire in 2017 and that will further complicate reliability in a region increasingly dependent on gas, van Welie said. In addition to coal and oil unit retirements, the Entergy (NYSE:ETR) Vermont Yankee nuclear facility has been retired and the company’s Pilgrim nuclear unit faces an uncertain financial future, van Welie said.

Ohio not counting on 11th hour reprieve from MATS retirements

As for Ohio, it is assuming that the 3,000 MW of coal retirements currently scheduled will happen regardless of how the U.S. Supreme Court rules on the U.S. Environmental Protection Agency (EPA) Mercury and Toxics Standards (MATS).

 “Those are already scheduled with PJM to be retired … and we are expecting those coal plants to come offline,” Haque said in response to a question from GenerationHub.

The key will be “what kind of guidance will be in that decision,” said Haque, who is an attorney himself.  

Ohio has also challenged the EPA Clean Power Plan and is staying mum, for now, about the possibility of filing any state implementation plant (SIP) to comply with it. The proposal would have states draft plans to cut power sector CO2 30% by 2030.

Ohio wants to keep its options open to see what happens on the legal front before it commits to a well-defined plan of action to slash carbon emissions, Haque said. Ohio is currently evaluating its current standards for renewable power and energy efficiency, Haque said.

Coal is going “out of style” and plenty of retirements are scheduled by American Electric Power (NYSE:AEP) and other generators, Haque said. While many combined-cycle plants have been announced or filed applications in the Midwest, many are still in early development, Haque said.

The Ohio commission said until he sees “steel is going in the ground” before he counts too heavily on the proposed gas-fired generation.

Ohio, like New England, is seeing a surge in natural gas plant proposals. Unlike New England, Ohio is home to booming shale gas production areas. As a result, Haque noted that the state probably won’t be relying much on winter backup fuels like oil.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.