NRG to Shutter, Repower Illinois Coal Units in Modernization Bid

NRG Energy is the latest company in a string of generators choosing to cease burning coal at generating units to comply with environmental rules.  

An environmental action plan to reduce air pollution in Illinois released by the New Jersey–based company on Aug. 7 proposes to retire the 251-MW coal-fired Unit 3 at the 761-MW Will County plant by April 2015, as well as to cease burning coal at two units (Joliet 29 and 9) at the 1.3-GW Joliet facility.

NRG, however, plans to convert the Joliet facility to natural gas by 2016. It also plans to continue burning powder river basin coal at its 681-MW Waukegan plant north of Chicago and at its 1.5-GW Powerton plant in central Illinois, choosing instead to implement dry sorbent injection and electrostatic precipitator upgrades at both plants.

The company acquired the plants with its purchase of Edison Mission Energy in April 2014. “Beyond employing a substantial number of people and contributing to the Illinois economy, these plants provide local reliability to the electric grid,” said NRG Executive Vice President Lee Davis in a blog entry on the company’s website.

“As we witnessed last winter, local generation is vital during periods of peak demand. Until now, the reliability services these four coal plants provide have come at a cost of higher than desired emissions—in short, they have not yet been updated to meet environmental standards.”

Under its new Illinois pollution plan, NRG will invest more than $500 million dollars by 2016 to “make improvements that single-handedly achieve 56% of Illinois’ state-wide carbon dioxide … reductions called for under President Obama’s proposed carbon pollution standards,” Davis wrote.

Chief Operating Officer Mauricio Gutierrez in an Aug. 7 earnings call said the measures, also outlined in an optimization and enhancement plan for the company’s Midwest Generation portfolio, would expand fuel diversity in the region while enabling NRG to comply with more stringent air regulations under the federal Mercury and Air Toxics Standards and Carbon Pollution Standards.

The decision to retire Will County Unit 3 was made after “careful consideration” of all the plants, including an analysis of which ones could be converted to a different fuel, said Gutierrez. “We looked at which of these assets have better access to natural gas supply, and Joliet was the one that had the best location for that.”

“The closure of Will County is a difficult decision for us, but the economics simply do not work in the current price environment, given the back-end capital investment that would be required,” he said. NRG, however, plans to keep the second unit at the plant, Unit 4, in operation as long as it can comply with all applicable environmental requirements, he added.

NRG’s proposed retirements come on the heels of more announced coal retirements across the nation.

Mississippi Power last week said it will repower, convert to natural gas, or shutter several coal units in Mississippi or Alabama to comply with a landmark settlement with the Sierra Club that will end legal challenges to the utility’s Kemper County integrated gasification combined cycle project. And American Electric Power last week separately announced it would close a coal plant and make changes at two others to resolve alleged Clean Water Act violations.

The Sierra Club’s Beyond Coal campaign notes that the Joliet 9 and 29 plants are the 173rd and 174th coal-fired units announced to cease burning coal since 2010.

Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)