New Jersey’s Last Two Coal Power Plants to Close within Months

The New Jersey Board of Public Utilities (NJBPU) approved a petition filed by Atlantic City Electric Co. (ACE) that modifies power purchase agreements (PPAs) and power sales agreements (PSAs) between ACE and Chambers Cogeneration Ltd. and Logan Generating Co., the last two coal-fired electricity generation units in New Jersey. Under the agreements, coal-fired generation will cease on or around May 31, 2022, Starwood Energy Group Global LLC, which owns the plants through investment affiliates, said.

The Logan Generating Plant is a 225-MW unit in Swedesboro, New Jersey. It entered commercial operation in September 1994. Logan was among the first commercial-scale pulverized coal plants in the U.S. to use selective catalytic reduction (SCR) technology, and the first to use a plate-type catalyst to reduce NOx emissions.

ACE entered into a PPA with Logan Generating Co. in August 1988, pursuant to which Logan agreed to sell 200 MW of energy and capacity to ACE. The existing PPA is scheduled to terminate in December 2024. Additionally, ACE and Logan are parties to a separate PSA.

The Chambers Cogeneration Plant in Carney’s Point, New Jersey is a 245-MW facility that also began commercial operation in 1994. In addition to supplying electricity to ACE, the Chambers plant has also sold electricity and steam to the adjacent Chambers Works facility owned by Chemours Co.

ACE entered into a PPA with Chambers Cogeneration Ltd. in September 1988, under which Chambers agreed to sell 184 MW of capacity, and up to 173.2 MWh of energy during the winter, and 187.6 MWh of energy during the summer, to ACE. The existing PPA is scheduled to terminate in March 2024. ACE and Chambers are also parties to a separate PSA that monetizes the value of energy and capacity above the maximum values set in the PPA and allows ACE to generate additional revenues for the benefit of customers. According to ACE, all energy and capacity it purchases pursuant to the PPAs and PSAs with Chambers and Logan is sold into the PJM wholesale market in an effort to mitigate cost impacts to ACE customers, and is not used by ACE to supply the needs of its retail distribution customers.

In the agreement with Starwood Energy, ACE will make a series of negotiated, fixed monthly payments for the remaining term of the existing PSAs and PPAs, which will be partly offset by payments to ACE customers from Logan and Chambers. Under this part of the agreement, ACE customers will see up to $30 million in energy bill savings through the end of 2024. “This accomplishment means more than bill savings for our customers; it means cleaner air for our communities and a safer environment for generations to come,” Doug Mokoid, region president for ACE, said in a statement.

“The modified agreements are great news for the residents of New Jersey because at long last we are ending coal generation in our state,” NJBPU President Joseph L. Fiordaliso said in a statement.

“We are pleased to continue our focus on sustainable energy transition by creating win-win solutions with our counterparties such as ACE,” Himanshu Saxena, CEO of Starwood Energy, said in a statement. “We appreciate the opportunity to support New Jersey and ACE’s environmental goals, as we permanently shut down the last two coal plants in New Jersey, and transition the site to 21st century clean energy solutions, such as battery storage. We appreciate the support from Governor Phil Murphy, NJ BPU, ACE, Sierra Club, 350NJ-Rockland, Environment New Jersey, and many other stakeholders and look forward to completing this monumental milestone for New Jersey.”

Gov. Phil Murphy and the New Jersey legislature have taken significant steps to advance the state’s clean energy economy, passing and signing into law a landmark Clean Energy Act. The legislation calls for the significant advancement of solar, energy storage, offshore wind, and energy efficiency. New Jersey has also established an Energy Master Plan, which sets a goal of achieving 100% clean energy by 2050, and promotes higher levels of electrification throughout the economy, including transportation.

“A key goal of the Energy Master Plan is dramatically reducing greenhouse gas emissions and today’s action by the Board is a massive step in that direction,” added Fiordaliso.

“Over the last several years, New Jersey has seen a steady decrease in greenhouse gas emissions because of my Administration’s aggressive approach to mitigate climate pollution, power past coal, and expand our renewable energy resource mix,” Gov. Murphy said in a statement released by NJBPU. “These agreements today allow us to further shift New Jersey’s energy portfolio away from harmful coal generation and focus on clean energy technology.”

ACE, an Exelon utility, said it continues to take major steps in advancing environmental and clean energy initiatives. This past September, the company announced a major climate change commitment, launching “a multi-faceted, action-oriented effort to help the state of New Jersey achieve its clean energy and climate goals.” As part of the commitment, ACE said it is focusing on actionable measures “to reduce its greenhouse gas footprint, deliver innovative solutions to empower customers to meet their climate change objectives, and drive collaborative efforts with stakeholder and community partners to achieve greater greenhouse gas reduction across South Jersey, while continuing efforts to address the impacts of climate change.”

“We applaud Governor Murphy’s and the state legislature’s efforts to advance a clean and sustainable energy future for all New Jerseyans and we are proud to do our part in helping to establish the state as a clean energy and climate leader,” Mokoid said.

In a statement issued by Sierra Club’s New Jersey chapter, Greg Gorman, conservation chair for the group, said, “This is a historic decision by the BPU, as it marks the end of coal burning in New Jersey, and an important step in implementing Governor Murphy’s Energy Master Plan. We commend Atlantic City Electric for taking this critical step to lower the carbon footprint of its electric supply, while at the same time securing a refund for its ratepayers. We’re also thrilled that Starwood Energy is looking to directly transition to cleaner, cheaper renewable energy at these sites, ending nearly three decades of pollution in Carneys Point and Penns Grove, historically overburdened communities on the Delaware River. This is a huge milestone in the state’s transition to a clean energy economy.” As Gorman alluded to, Starwood Energy plans to decommission the plants and work with a clean energy developer to bring renewable energy projects to the sites.

Aaron Larson is POWER’s executive editor (@AaronL_Power, @POWERmagazine).

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