FirstEnergy Solutions this week told Mid-Atlantic grid operator PJM Interconnection that it would move to close four coal and oil plants by 2021. AES also announced it would likely be forced to close an Oklahoma plant, in the Southwest Power Pool, after Oklahoma Gas & Electric (OG&E) did not extend its power purchase agreement.
Representatives from both companies cited market pressures as a reason for the closures.
Without the support of OG&E, the AES Shady Point plant could close as soon as January. Lundy Kiger, the vice president and director of government relations at the Oklahoma plant, said “as an independent, it would be difficult for us to bid into the larger market as a power producer.”
According to a statement from Don Moul, FirstEnergy’s president of generation and chief nuclear officer, the company feels the current market “fails to recognize” the resilience measures offered by coal. FirstEnergy said one of its plants would continue functioning until 2020 and the other three would go offline in 2021.
In total, the plants encompass 4,364 megawatts of coal-fired power in three states and 13 megawatts of oil in Ohio.
FirstEnergy’s announcement is the latest salvo in a thickening drama over coal and nuclear retirements and the federal administration’s attempts to buoy their decline.
In June, after the leak of an internal memo detailing possible ways to support coal and nuclear, the Trump administration directed the Department of Energy to “prepare immediate steps” to help plants. Since then, no details on that plan have emerged.
FirstEnergy’s Wednesday announcement further indicates the energy supplier feels it doesn’t have time to wait. In March the utility announced it would deactivate three nuclear plants through 2021.
“Our decision to retire the fossil-fueled plants was every bit as difficult as the one we made five months ago to deactivate our nuclear assets,” said Moul. “As with nuclear, our fossil-fueled plants face the insurmountable challenge of a market that does not sufficiently value their contribution to the security and flexibility of our power system.”
In March, the utility requested economic support from the administration for its fossil fuel plants in the name of grid resilience. Days later, in April, FirstEnergy filed for bankruptcy protections encompassing FirstEnergy Solutions and subsidiaries FirstEnergy Generation and FirstEnergy Nuclear Operating Company.
Documents show the company has employed a top lobbying firm, which has contacted administration officials regarding Section 202(c), the law cited in FirstEnergy's emergency request. FirstEnergy's announcement this week could add urgency to the Trump administration's support efforts.
Earlier this month, the administration announced its Affordable Clean Energy rule, a replacement for the Clean Power Plan that some experts say could extend the life of select coal plants. It appears FirstEnergy doesn't believe the rule will help its plants announced for closure on Wednesday.
Coal and nuclear still play an important role in the generation mixes of PJM and the Southwest Power Pool. On Thursday, coal accounted for about 29 percent of PJM’s generation mix, with nuclear accounting for about 26 percent. For SPP on Thursday, coal accounted for just over 44 percent of the generation mix and nuclear accounted for 4.7 percent.
Those mixes are changing. In April, PJM said it didn’t need FirstEnergy’s nuclear plants to ensure reliability. And though AES Shady Point said it plans to participate in an upcoming OG&E request for proposals, OG&E indicated it would look for cheaper options to replace the generation from the AES plant. Solar and wind have shown significant price drops since the AES plant came online in 1991.
“We believe there are ample savings to be had by looking in the market,” OG&E spokesperson Brian Alford told the Associated Press.