A shift in Pa.'s energy market as two power plants move toward closure
A pair of western Pennsylvania coal-fired power plants owned by FirstEnergy will be deactivated next week. The closures come in the midst of a nationwide debate about the future of coal in a changing regulatory atmosphere and as more companies turn to natural gas for power.
At a hearing before the House Consumer Affairs Committee yesterday, FirstEnergy President James Lash said the company has no plans to sell the Mitchell Power Station in Washington County and the Hatfield’s Ferry plant in Greene County, according to the Observer-Reporter.
“We are not out there seeking to sell. We know what the market is, what the offers would be. We would turn our head,” Lash said at the hearing in Monongahela Fire Hall chaired by state Rep. Peter J. Daley, D-California.
PJM Interconnection, which oversees the region’s electrical transmissions, said that the closures would not destabilize the power grid.
At the hearing, Public Utility Commission Pamela Whitmer disagreed with that assessment. Whitmer said FirstEnergy only gave the PJM Interconnection the “bare minimum” of 90 days to examine the possible impacts of the closures to the electrical grid which she argued is not enough time.
In a statement, the PUC said it “supports the restructured electricity market in Pennsylvania,” but needs to “balance the needs of consumers and utilities” while “working to ensure safe and reliable utility service at reasonable rates.”
The Observer-Reporter reports FirstEnergy’s president blamed the closures on the changing market for coal and the price of complying with new federal emissions standards.
[Lash] said the plants are losing money now at a time when demand for electricity is flat and coal faces growing competition from the low price of natural gas because of the boom of drilling into the Marcellus Shale formation.
“We don’t see the demand for electricity picking up. The economy has not been robust since 2008,” Lash testified.
He said the industry is uncertain about how the new federal Environmental Protection Agency regulations will affect coal in years to come as an energy source at a time when both plants need to spend $270 million on upgrades to comply with the pending rules.
“That’s a lot of money,” Lash said, adding the investment would cause additional loses if the plants were to be kept open.
Burning coal emits large amounts of carbon dioxide, a powerful greenhouse gas. Natural gas emits considerably less and is currently very cheap, which has caused a shift in how power companies are generating electricity. However, burning natural gas releases methane which some scientists and environmentalists say could have greater contributions to global warming than burning coal.
In one of the Obama administration’s first major plans to address climate change, the EPA recently released new standards for all future coal- and natural gas-fired power plants. While most modern natural gas facilities are expected to easily fit the new regulations, it will be much more difficult for coal.
That has coal country lawmakers and industry leaders on the defense. PennLive.com reported this week that acting Department of Environmental Protection secretary Chris Abruzzo sent a letter to the EPA. Abruzzo expressed his solidarity with 18 other states that produced a white paper arguing that the EPA is overstepping its regulatory bounds.
“As you know, Pennsylvania’s electric generation portfolio consists of considerable coal and natural gas fueled electric generation units, and therefore, will be significantly impacted by whatever final standards are adopted.”
He goes on to say that the federal government should “respect the role of individual states to set specific control standards from individual sources.”
But a report released this week by the DEP predicts a continued decline in the state’s coal production by more than 25 percent within the next four years. The report says coal will remain the “dominant” source for power in Pennsylvania, while reporting a rise in natural gas-fired power to account for one quarter of the electricity produced by 2017.