In a move to reduce the burden of compliance costs, FirstEnergy Inc. will shutter two coal-fired plants in western Pennsylvania.
This move comes after more stringent environmental policies are in the process of implementation in the U.S.
Operations at the Hatfield’s Ferry Power Station in Masontown and Mitchell Power Station in Courtney will end Oct. 9, 2013. The lingering weak market prices of electricity also influenced FirstEnergy to shut down these facilities. In 2012, FirstEnergy decided to close nine coal plants.
The combined capacity of Ferry and Mitchell Power Stations was 2,080 megawatts (MW) and accounted for 10 percent of the company’s total generation capacity. However, the facilities should incur about 30 percent of the projected $925 million regulatory cost, which FirstEnergy was to incur to comply with the Mercury and Air Toxics Standards (“MATS”) provisions.
FirstEnergy’s consolidated business will not suffer because of the closures as it will still retain a sizeable generation capacity of over 18,000 MW, officials said. Moreover, the company will witness some rearrangement in its resource portfolio, which will be either non- or low-emitting, including nuclear, hydro, pumped-storage hydro, natural gas and scrubbed coal units.
Even after the deactivations, FirstEnergy will maintain a generation mix of 56 percent coal, 22 percent nuclear, 13 percent renewables and 9 percent gas/oil, company officials said.
The company expects these high-tech environment control equipment will curb nitrogen oxides, sulfur dioxide and mercury emissions by 84 percent, 95 percent and 91 percent, respectively, from 1990 levels. Carbon dioxide emission should decrease by 20 percent to 30 percent from the 1990 level by 2020.
FirstEnergy’s demand has been stagnant since 2007, said George Farah, the company’s vice president of fossil engineering and construction.
“The economy in this region didn’t seem to be recovering,” he said.
It’s only within the last couple of months that FirstEnergy began to seriously consider deactivating the two plants, in large part as a response to a recent capacity auction.
The auction — organized by PJM Interconnection, a Valley Forge, Pa.-based grid operator — is to secure electricity supply three years in advance. In May, FirstEnergy learned what the grid would need in 2016. As it turns out, power from the Mitchell and Hatfield’s Ferry plants would bring too much unwanted power.
Power companies offered much lower prices for generation during the most recent capacity auction. Utilities had a lot of generation to choose from, with new natural gas plants pitching in for retiring coal plants. And, on top of that, there was no growth in demand.
The results of the auction signaled neither an appetite for FirstEnergy’s two southwestern Pennsylvania coal plants nor a sustainable electricity price to keep them going, Farah said.