FirstEnergy (NYSE:FE) and its FirstEnergy Solutions subsidiary will shut down or sell certain coal-fired capacity at two of its Ohio plants in response to challenging market conditions, the company said early July 22.
Altogether FirstEnergy said it is retiring 856 MW of coal-fired capacity, which accounted for 4% of FirstEnergy’s electric generation during 2015. The company had previously retired a number of coal plants in April 2015, citing the Environmental Protection Agency (EPA) mercury and air toxics standards (MATS).
The company plans to sell or deactivate the 136-MW (MW) Bay Shore Unit 1 in Oregon, Ohio, by October 2020. In addition, Units 1-4 of the company’s seven-unit W.H. Sammis Plant in Stratton, Ohio – collectively representing 720 MW of capacity – will be retired in May 2020.
Units 5-7 will continue to provide 1,490 MW of reliable baseload generation.
In 2015, Bay Shore Unit 1 and Sammis Units 1-4 contributed about 4% of the electricity produced by the company’s generating plants. FirstEnergy does not intend to offer these units into the PJM capacity auction for the 2020-2021 timeframe.
Bay Shore had a 68% capacity factor in 2014 and the much larger Sammis station had a 55% capacity factor in 2014, according to GenerationHub data.
“We have taken a number of steps in recent years to reduce operating costs of our generation fleet,” said FirstEnergy Generation President Jim Lash. “However, continued challenging market conditions have made it increasingly difficult for smaller units like Bay Shore and Sammis Units 1-4 to be competitive. It’s no longer economically viable to operate these facilities.”
No job reductions are expected at either plant. FirstEnergy will work with any potential buyer to discuss continued employment for the 78 employees at Bay Shore, or if the plant is deactivated, provide employees with job opportunities at other FirstEnergy facilities. There are 368 employees at Sammis.
Plant deactivations are subject to review for reliability impacts, if any, by PJM Interconnection, the regional transmission organization that controls the area where they are located.
FirstEnergy and British Petroleum collaborated on a project to install a fluidized-bed combustion boiler at Bay Shore Unit 1, the largest of its kind in the world when it came online in 2000. The boiler is fueled by petroleum coke, a byproduct of the refining process, and Bay Shore provides steam to the refinery for its operations.
Bay Shore will be deactivated when this agreement with the refinery ends if a buyer for Unit 1 is not identified.
Bay Shore Units 2-4 were deactivated in 2012 based on the impact of environmental rules, FirstEnergy said.
W.H. Sammis is FirstEnergy’s largest coal-fired power plant in Ohio. The remaining units include Unit 5, which came online in 1967 and generates 300 MW, and Units 6 and 7, which came online in 1969 and 1971 respectively and generate 600 MW each.
In 2010, FirstEnergy completed a $1.8bn emissions control project at Sammis to help improve air quality and comply with current environmental regulations.
Sammis Units 1-4, each with 180 MW of capacity, came online between 1959 and 1962.