In recent statements, FirstEnergy said it was being forced by EPA’s Mercury and Air Toxics Standards (MATS) and other Agency regulations to close nine older coal-fired power plants in four states. But an environmental group quickly questioned the claim and said the plants were being shut down for a range of business reasons in addition to federal environmental regulations.
In late January 2012, FirstEnergy announced that its subsidiaries would retire six plants in Ohio, Pennsylvania, and Maryland by September 1, 2012. Two weeks later, the company added three facilities in West Virginia to the list of closings. All of the plants serve mostly as peaking or intermediate facilities. The total generating capacity of the nine plants is about 3,349 megawatts, and the plants provided about 11 percent of the energy produced by the company over the last three years. FirstEnergy has about 23,000 MW of generating capacity and services 6 million customers in six states.
FirstEnergy said it recently completed a comprehensive review of its coal-fired generating plants and determined that additional investments to implement MATS and other environmental rules would make these older plants even less likely to be dispatched under market rules. The retirements are subject to review for reliability impacts by PJM Interconnection, the regional transmission organization that controls the area where they are located.
But in a blog, Mark MacLeod, Director of Special Projects for the Environmental Defense Fund, said there is more to the story than EPA regulations. According to MacLeod, First Energy announced that six of the plants would be either switched from full-time to seasonal operations or temporarily mothballed more than 16 months ago – before EPA even issued its MATS proposal.
Also, the age of the plants factored into the decision, says MacLeod, who notes that three of the plants were built between 1943 and 1960. He cites a statement by former Senate Majority Leader George Mitchell, who noted that legislative decisions about existing coal-fired plants made by lawmakers when the Clean Air Act was enacted in 1970 were based on the assumption that electric utility units had a lifetime of 30 years.
MacLeod also argues that competition from increasing supplies and the lower prices of natural gas is forcing the shift away from inefficient older coal-fired units. He adds that it is simply not cost effective to keep paying the fixed costs needed to maintain older units for limited operation.
“Business decisions in the utility sector are complex,” says Macleod, who warns against using environmental and health protections as a scapegoat for the “choice” to retire old coal-fired power plants.
FirstEnergy indicates that the closing will directly affect about 634 employees. However, the final number should be less as some employees will be considered for openings at other FirstEnergy plants, and others will take advantage of a retirement benefit being offered to those 55 years of age and older.