NRG switches gears; to keep Avon Lake plant in Ohio on coal for the time being

In a rare bit of good news for the coal industry about coal-fired power, NRG Energy (NYSE: NRG) now plans to keep operating its Avon Lake power plant in Ohio on coal for the near-term, instead of switching it to natural gas.

NRG spokesman David Gaier told Generation Hub in a Sept. 23 interview that the coal-fired Unit 7 (94 MW) will be switched to auxiliary boiler service, so it will rarely run. But the coal-fired Unit 9 (638 MW) will remain on coal, though possibly different types of coal to help the company achieve clean-air compliance.

U.S. Energy Information Administration data shows Avon Lake earlier this year getting coal from the Hopedale mine in Ohio of Hopedale Mining under month-to-month spot deals, and from CONSOL Energy‘s Bailey/Enlow Fork mine complex in Pennsylvania under a contract that was, as of May of this year at the time of the latest monthly EIA report, due to expire in December 2016.

NRG has a one-year extension, to April 15, 2016, on the federal Mercury and Air Toxics Standards (MATS) compliance deadline for Avon Lake. In the spring of 2016, NRG plans to install activated carbon injection for mercury control, dry sorbent injection for SO2 control and make electrostatic precipitator upgrades for enchanced particulate control on the coal units.

Gaier said the decision not to switch to gas, at least for the time being, is for two main reasons.

  • One is that the company had been hoping for a February approval from the Ohio Power Siting Board on a gas pipeline to serve the refueled Avon Lake plant. But the board didn’t grant that approval until June 4, well beyond the March 31 deadline for NRG to do any tree clearing on the pipeline route in the early part of this year. The March 31 deadline is to protect nesting habitat for the endangered Indiana Bat.
  • The second reason is new capacity performance market rules from PJM Interconnection that place certain restraints that a coal-fired Avon Lake plant can meet.

Gaier emphasized that the company retains the ability to switch Avon Lake to natural gas in the future, if the situation warrants.

He noted that NRG is still converting its Joliet Units 6-8 in Illinois, New Castle plant in Pennsylvania and Shawville plant in Pennsylvania from coal to natural gas.

There has also been a plan to convert Dunkirk Units 2-4 in New York from coal to gas, and to keep Unit 1 in its current mothball status. But, Entergy (NYSE: ETR), a participant in the New York power markets, has sued the New York State Public Service Commission over its power to approve that refueling. So, pending resolution of the lawsuit, the only currently operating unit at Dunkirk, Unit 2, will be mothballed at the end of this year, when a grid reliability deal expires, and the whole plant will then remain in mothballs for the time being, Gaier said.

New York ISO to report on grid impacts of Dunkirk mothballing, Huntley retirement

Incidentally, the New York ISO sent a Sept. 24 letter to the New York PSC about the situation with Dunkirk and another coal plant, Huntley.

“In your August 28, 2015 letter, you requested that the New York Independent System Operator, Inc. (NYISO) determine whether the retirement of NRG Energy Inc.’s Huntley generating units 67 and 68 (‘Huntley’), effective March 1, 2016, and the mothballing of NRG Energy Inc.’s Dunkirk generating units (‘Dunkirk’), effective January 1, 2016, would have an adverse impact on the reliability of the New York State transmission system. As a threshold matter, it is important to note that the retirement of any generating facility resource could have adverse impacts on the short-term and long-term reliability of the New York State transmission system.”

The New York ISO added: “Further coordinated analysis by National Grid and the NYISO is necessary to determine impacts to reliability on both the local non-bulk transmission system and the Bulk Power System due to the retirement of Huntley and the mothballing of Dunkirk. This coordinated analysis will include consideration and evaluation of operating procedures and modifications to system configurations. The NYISO will also assess the resource adequacy of the overall system with the Huntley and Dunkirk units removed for the ensuing five years. The NYISO and National Grid will provide a coordinated follow-up response to the Department of Public Service by October 30, 2015. We will keep your staff informed of our progress and share key findings as study results become available.”

NRG Energy’s Huntley Power LLC on Aug. 25 had filed a brief notice with the New York PSC that it intends to cease operation and retire Units 67 and 68 at the Huntley facility on March 1, 2016. Huntley Units 67 and 68 are coal-fired units, with 218 MW of nameplate capacity apiece. The units are located in Tonawanda, N.Y., and are interconnected to the National Grid system in NYISO Zone A.

“The current power prices and market conditions in New York State are such that it is no longer economical for NRG to continue operating the Units,” said the Aug. 25 notice. “Thus, because the facility is not currently economic and is not expected to be economic, NRG intends to retire the units. Should circumstances change, NRG will notify all parties to this notice.”

(Sept. 23 article amended on Sept. 24 to add information about New York ISO letter.)

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.