FirstEnergy Corp. last week said it would cut back operations or idle 1,620-MW of coal-fired capacity in Ohio for up to a year to reduce operating costs, while Xcel Energy announced plans to shut down nearly 900-MW of coal-fired capacity to generate a savings of nearly $225 million. Reasons for the cutbacks included the continued slow economy, lower demand in electricity, and uncertainty related to proposed new federal environmental regulations.
Akron-based FirstEnergy said that from September 2010 to August 2011, it would operate units with a minimum three-day notice and in response to customer demand. Units affected would be the Bay Shore units 2 to 4 in Oregon, Ohio; Eastlake Plant units 1-4 in Eastlake, Ohio; the Lake Shore Plant in Cleveland, Ohio; and the Ashtabula Plant in Ashtabula, Ohio.
Beginning in September 2011, for approximately 18 months, the Bay Shore and Eastlake units will be available only in the winter and summer months, and the Ashtabula and Lake Shore plants will be temporarily idled.
The units affected, a combined capacity of 1,620 MW, produced approximately 6.8% of the company’s total generation output in 2009. The changes are subject to review by the Midwest Independent Transmission System Operator , PJM Interconnection and the independent market monitors to ensure that there is no negative impact on system reliability.
The changes would “provide more predictability while maintaining availability for future operations, as needed,” FirstEnergy said, adding that efforts will be made to reassign affected employees to other FirstEnergy facilities.
FirstEnergy also expects to write off up to $287 million in value related to the assets with the changes. “While we’ve seen signs of economic recovery in the first half of this year compared with 2009, customer demand is still well below 2008 levels,” said Gary R. Leidich, executive vice president of FirstEnergy and president of FirstEnergy Generation Corp.
“As a result, our smaller, load-following plants have been called upon to operate less frequently. By reducing operations at these facilities, we will better match our generation with our expected customer loads and position our company to comply with ever increasing environmental regulations.”
Xcel Energy, meanwhile, said its plans to retire, repower, or retrofit plants were a “low-cost option to significantly reduce Colorado coal-fired generation emissions” as called for under the recently enacted state Clean Air Clean Jobs Act.
Xcel’s plans included retiring its 186-MW Valmont and 717-MW Cherokee plants by the end of 2017 and 2022, respectively. The company also proposed to repower its Cherokee power plant with 883-MW of natural gas generation.
A switch to natural gas generation would also be made at the 111-MW Arapahoe Unit 4, the company said. Plans also included retrofitting about 950 MW of coal-fired generation at the Pawnee (505 MW) and Hayden (446 MW) power plants with modern emission control technology.
Xcel supported Colorado’s Clean Air Clean Jobs legislation, a law passed last spring that required the company to propose reductions in oxides of nitrogen by 70-80% by 2017, to meet anticipated federal clean air regulations. The plan would reduce emissions of oxides of nitrogen from the targeted plants by 75% at the end 2017, and by 89% at the end of 2022.
“Over the next several years, the U. S. Environmental Protection Agency will require the state of Colorado to comply with a series of regulatory mandates unprecedented in the history of the Clean Air Act,” said Dick Kelly, Xcel Energy chairman and CEO. “We believe our proposal is the best way to meet new environmental requirements in a manner that preserves reliability and minimizes customer costs.”
The total cost of the plan, if approved by the Colorado Public Utilities Commission, would result in new construction investment of approximately $1.3 billion over the next 12 years, Xcel said.
The company expects that its proposal will result in savings of approximately $225 million when compared to the traditional approach of retrofitting all of these plants with emissions controls. “The savings compared to an all-controls approach would be more than $950 million if there is federal regulation that places a price on carbon dioxide emissions,” Xcel said.
While the plan also allowed Xcel to meet Colorado’s statewide carbon dioxide reduction goal of 20% before the 2020 target, the company admitted that “prices will need to rise over the next several years as we make investments to meet customer demand, and to enhance our transmission system and replace aging distribution infrastructure.”
Sources: FirstEnergy, Xcel Energy, POWERnews