Public Service Enterprise Group (PSEG) (NYSE:PEG) CEO Ralph Izzo confirmed to financial analysts on Feb. 19 that his company expects to retire coal generation at the Bridgeport plant in Connecticut within five years.
“We would anticipate retiring the Bridgeport Harbor coal unit in five years” – provided that the company can successfully install a 485-MW combined-cycle natural gas facility at the property, Izzo said during a quarterly earnings call.
Izzo does not foresee any real difficulty in getting the new combined-cycle unit commissioned. PSEG announced days earlier that the gas plant planned for Bridgeport Harbor had cleared the ISO New England (ISO NE) forward capacity auction. The new gas unit is expecting to start operation in 2017.
This isn’t unexpected given the Community Environmental Benefit Agreement that PSEG singed with officials in Bridgeport last month. The agreement envisions the retirement of the coal plant in the summer of 2021.
Izzo made the statements in response to a question about the company’s changing fuel mix. Coal units are running less and some coal units are being used for peaking purposes, he said.
“We don’t see any new generation build in the foreseeable future – although you never say never,” Izzo said. PSEG Nuclear has submitted an early site permit application to the Nuclear Regulatory Commission (NRC) to vet a potential reactor site alongside its existing New Jersey reactors. That move, however, is basically seen as keeping the nuclear option open in the distant future.
Company officials noted that the Public Service Electric & Gas (PSE&G) utility territory experienced the warmest December on record with an average December temperature of almost 48 degrees.
The nuclear fleet for PSEG Power recorded a capacity factor of more than 85% in the fourth quarter of 2015, which was slightly better than 4Q 2014. The capacity factor for its combined-cycle gas units in PJM and New York was slightly better than 64%, or 4% better than 4Q 2014.
The company’s coal-fired generation in Pennsylvania showed a capacity factor drop from more than 68% in 4Q 2014 to less than 49% in 4Q 2015, according to PSEG data.
The nuclear fleet’s capacity factor for all of 2015 was better than 90%, which was roughly 1% better than 2014. Nuclear energy accounted for more than half of PSEG Power’s total electric generation in 2015.
PSEG’s average fuel cost was $10.73/MWh for the fourth quarter and $15.59/MWh for 2015 as a whole.
Speaking of fuel costs, PSEG spent far less on coal in 2015. After spending $208m on coal during 2014, the company spent only $163m on coal in 2015. (The chart in the PSEG webcast materials did not specify whether the fuel cost included transportation).
The PSEG capital spending forecast calls for spending $11.5bn during the 2016-to-2018, which is up 21% over 2013-2015. Of that $11.5bn amount, 72% will be earmarked for PSE&G and 27% for PSEG Power.