AES takes writedown over Killen coal plant in Ohio

During the second quarter of 2016, AES Corp. (NYSE: AES) tested the recoverability of its long-lived generation assets at subsidiary Dayton Power & Light (DPL), said AES in its Aug. 5 quarterly Form 10-Q report.

Uncertainty created by the Supreme Court of Ohio’s June 20, 2016, opinion that reversed a Public Utilities Commission of Ohio decision on DPL rates, lower expectations of future revenue resulting from the most recent PJM Interconnection capacity auction, and higher anticipated environmental compliance costs resulting from third-party studies were collectively determined to be an impairment indicator for these assets.

The Form 10-Q said: “The Company performed a long-lived asset impairment analysis and determined that the carrying amount of Killen, a coal-fired generation facility, and certain DPL peaking generation facilities were not recoverable. The Killen and DPL peaking generation asset groups were determined to have a fair value of $84 million and $5 million, respectively, using the income approach. As a result, the Company recognized a total asset impairment expense of $235 million.”

Killen, located at Wrightsville, Ohio, has one coal-fired unit and one oil-fired combustion turbine. It has a summer generating capacity of 618 MW. DPL owns 67% of the plant and operates it.

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.