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Struggling to Compete with Natural Gas, Pennsylvania Coal Plant Files for Bankruptcy

January 14, 2017

Homer City Generation, operator of a three-unit, 1,884-MW coal-fired generating station about 45 miles northeast of Pittsburgh, Pa., has initiated a voluntary, pre-packaged Chapter 11 case in the U.S. Bankruptcy Court for the District of Delaware.

The financial restructuring process is expected to eliminate more than $ 600 million in existing secured debt from Homer City’s balance sheet and provide for an orderly transition of ownership, according to the company. The plant expects to continue operating, and to meet its ordinary obligations, as the case proceeds.

Filing a pre-packaged Chapter 11 case means the company has already arranged the necessary approvals for its proposed plan of reorganization. By doing so, the company is able to expedite the process, while eliminating some of the uncertainty.

Homer City has been struggling due to depressed power market prices, resulting from the low cost of natural gas. Located virtually in the center of the Marcellus Formation, Homer City’s finances have been doomed by the abundance of natural gas, combined with higher environmental compliance costs.…

Idaho Power Pursues Accelerated Depreciation of North Valmy Coal Plant

October 31, 2016

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Idaho Power—co-owner with NV Energy of the two-unit 522-MW North Valmy Generating Station near Battle Mountain, Nevada—filed a request with the Idaho Public Utilities Commission (IPUC) last week seeking to accelerate the depreciable life of the power plant from 2031 for Unit 1 and 2035 for Unit 2 to 2025 for both units.

In Idaho Power’s 2015 Integrated Resource Plan (IRP), the company said its preferred portfolio included retirement of the North Valmy plant at year-end 2025. The timing matched the expected completion date of the Boardman to Hemingway transmission line project, which will add a new connection to the Pacific Northwest. The preferred portfolio included the addition of 60 MW of demand response and 20 MW of ice-based thermal energy storage in 2030, and the addition of a 300-MW combined cycle combustion turbine in 2031.

The 2015 IRP included a 2016 action item to continue working with NV Energy “to synchronize depreciation dates and determine if a date can be established to cease coal-fired operations” at North Valmy Units 1 and 2.…

Court Orders EPA to Evaluate Coal Industry Job Losses Related to Air Pollution Rules

October 19, 2016

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A federal court has ordered the Environmental Protection Agency (EPA) to file a plan and schedule to evaluate the consequences of its air pollution rules on jobs, finding for a giant coal company that is suing the agency for an alleged “war on coal” waged over the past five years.

In an October 17 summary judgment, U.S. District Judge John Preston Bailey for the U.S. District Court for the Northern District of West Virginia ordered the agency to file the plan and schedule within 14 days.

The EPA must fully comply with a provision in the Clean Air Act (Section 321[a]) adopted by Congress in 1977 that requires the agency to continually evaluate job losses, which may stem from air pollution rules, said Bailey. Moreover, if the EPA refused to conduct the required evaluation, it would constitute an “abuse of discretion,” owing to the importance, widespread effects, and the claims of the coal industry, he said.

Irreparable Harm

The case stems from a lawsuit filed in March 2011 by troubled coal giant Murray Energy Corp.…

MPUC Decision Spells End for Two Coal Units at Xcel’s Largest Plant

October 15, 2016

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The Minnesota Public Utilities Commission (MPUC) voted unanimously to support Xcel Energy’s latest long-range plan, which will transform the company’s energy fleet.

Xcel expects to more than double its renewable energy portfolio as a result, delivering greater than 60% carbon-free energy to its Upper Midwest (Michigan, Minnesota, North Dakota, South Dakota, and Wisconsin) customers by 2030.

Coal-Fired Capacity Takes a Hit

The MPUC approval finalizes Xcel’s decision to retire Units 1 and 2 at the Sherburne County Generating Plant (Sherco, Figure 1) in Becker, Minn. Sherco is a 2,222-MW three-unit facility—Xcel’s largest. The company announced last year that it wanted to close the 1976- and 1977-commissioned units, but it still plans to continue operating the 860-MW Unit 3 (added in 1987). Xcel co-owns that unit with Southern Minnesota Municipal Power Agency, which holds a 41% stake.

1. Sherburne County Generating Plant. Units 1 and 2 will be retired in 2023 and 2026, respectively. Courtesy: Xcel Energy

Laura McCarten, regional vice president of Xcel Energy, told POWER that Unit 1 would be retired in 2023 and Unit 2 would be shuttered in 2026.…

PSEG Will Retire Two New Jersey Coal Power Plants

October 11, 2016

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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.…

AEP to Shed Ohio, Indiana Coal and Gas Plants in Move for Full Regulation

September 20, 2016

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In an effort to become a fully regulated power company, American Electric Power (AEP) has agreed to sell four Midwestern power plants—representing a total of 5.2 GW—to a newly formed joint venture of Blackstone and ArcLight Capital Partners for about $ 2.17 billion.

AEP will sell:

the 1,186-MW natural gas–fired Lawrenceburg Generating Station in Lawrenceburg, Ind.
the 840-MW natural gas–fired Waterford Energy Center in Waterford, Ohio
the 507-MW natural gas–fired Darby Generating Station in Mount Sterling, Ohio
the 2,665-MW coal-fired Gen. James M. Gavin Plant in Cheshire, Ohio

All generating capacity is located in the region served by PJM Interconnection.

The sale is expected to close in the first quarter of 2017, but it is subject to regulatory approvals from the Federal Energy Regulatory Commission (FERC), the Indiana Utility Regulatory Commission, and federal clearance pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, AEP said.

Moving on Out

Efforts to formalize a power purchase agreement that would have supported continued operation of AEP and FirstEnergy generation capacity in Ohio were punctured by the Federal Energy Regulatory Commission (FERC) on April 27, though the Public Utilities Commission of Ohio (PUCO) had blessed the deal just a month before.…