Public Service Enterprise Group (PSEG) will close the 620-MW Hudson Generation Station in Jersey City, N.J., and the 632-MW Mercer Generation Station in Hamilton Township, N.J., on June 1, 2017.

“The sustained low prices of natural gas have put economic pressure on these plants for some time. In that context, we could not justify the significant investment required to upgrade these plants to meet the new reliability standards,” Bill Levis, president and COO of PSEG Power, said in a statement released on October 5. “The plants have been infrequently called on to run and neither plant cleared the last two PJM capacity auctions. The plants’ capacity payments have been critical to their profitability and PSEG’s ability to continue to invest in modernizing them.”

PSEG said it is committed to working with union representatives to limit the impact of the closures on the 200 affected employees, roughly split between the two facilities.

“These plants have played a critical role in powering the growth and economic expansion of New Jersey and PSEG is grateful to our employees who have played a part in building and running them for the past 50 years,” said Levis. “We will work with our union and PSEG leadership to ensure that the plants continue to operate safely through their retirement dates and to place as many employees as possible within PSEG’s family of companies.”

The company said it is investing more than $600 million in a new 540-MW combined cycle gas plant being constructed at its existing Sewaren Generating Station in Woodbridge, N.J. A groundbreaking ceremony was reportedly held at the site on June 14, 2016. The unit, known as Sewaren 7, is expected to be operational by the summer of 2018.

That plant is designed to operate on two types of fuel: natural gas and ultra-low-sulfur distillate fuel oil. Natural gas is supplied to Sewaren Generating Station from both the Texas Eastern and Transco pipelines, which provides a high level of reliability. On occasions when gas may be curtailed, Sewaren 7 will have the option to run on ultra-low-sulfur distillate fuel oil as a backup.

With the announced closing of the coal plants, New Jersey’s energy supply will be split almost evenly between nuclear and natural gas, with a small amount of renewable energy.

“We continue to believe that it is unwise for New Jersey to become too overly dependent on one source of energy,” said Levis. “With the continued low cost of natural gas, it is important that we recognize and support the full value of non-carbon, non-polluting nuclear and renewable energy.”

PSEG said it is evaluating all options for future use of the Hudson and Mercer sites.

Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)