AES Corp. to Retire 990 MW of Coal Capacity on Environmental Rule Concerns

AES Corp.’s subsidiary Dayton Power & Light (DP&L) plans to retire six coal-fired units representing about 390 MW at its 414-MW Hutchings coal-, gas-, and oil-fired plant in Miamisburg, Ohio, by June 2015 as a result of existing and expected environmental regulations, including the Mercury and Air Toxics Standards (MATS). The announcement made in mid-May came on the heels of Indianapolis Power & Light Co.’s (IPL’s) announcement that it plans to retire 600 MW of coal-fired capacity to comply with environmental rules.

AES disclosed in a recent Securities and Exchange Commission filing that DP&L has notified grid operator PJM of its planned retirements by June 2015 of Hutchings Units 1, 2, 3, 4, and 6, all of which were commissioned between 1948 and 1953. Hutchings Unit 4 is currently out of service with damage to its turbine and will be retired by June 2013.

“Conversion of the coal-fired units to natural gas was investigated, but the cost of investment exceeded the expected return. In addition, DP&L owns approximately 207 MW of coal-fired generation at Beckjord Unit 6, which is operated by Duke Energy Ohio. The co-owners of Beckjord Unit 6 have notified PJM that they plan to retire Beckjord Unit 6 by June 1, 2015. At this time, DP&L does not have plans to replace the units that will be retired,” the SEC filing says.

Earlier in May, IPL, another AES subsidiary, also announced it plans to retire six existing coal-fired units at its Eagle Valley Generating Station and retire or refuel four coal-fired units at the Harding Street Generating Station—a total of 600 MW of capacity—in an effort to comply with the new MATS rule.

IPL said it filed a request with the Indiana Utility Regulatory Commission (IURC) to build a new 650-MW combined cycle gas turbine power station at its Eagle Valley Generating Station. It also suggested plans are under way to switch Harding Street Generating Units 5 and 6, totaling 200 MW, from coal to natural gas. The total estimated cost of these projects is $667 million.

If the IURC approves these projects, they could be completed by April 2016, but AES said in its recent SEC filing that if the Harding Street Units are not refueled, they will likely need to be retired because “it is not economical to install controls on those units to comply with MATS.”

—Sonal Patel is POWER’s senior writer. This story was originally published on May 16 in POWERnews.