AES to shut or convert coal power plants in Indiana and Ohio

Mon May 13, 2013 12:03pm EDT

May 13 (Reuters) - U.S. power company AES Corp said its units expect to retire or repower several coal-fired units in Indiana and Ohio, and possibly build a natural gas plant over the next several years.

AES is not alone in shutting coal plants in the United States.

Since 2009, U.S. power companies have announced plans to shut or convert more than 50,000 megawatts of coal-fired plants over the next several years as cheap natural gas and power prices have made it uneconomic to upgrade emissions systems to meet stricter planned federal and state environmental rules.

In Indiana, AES said its Indianapolis Power and Light (IPL) unit filed with state regulators for a certificate to build a 550- to 725-MW combined cycle natural gas plant at its Eagle Valley power facility, the company told shareholders in federal filings last week.

The company said the new plant, if approved, is expected to enter service in April 2017.

IPL also filed with state regulators to refuel the 106-MW Units 5 and 6 of its Harding Street plant from coal to gas.

The company said the refueling project, if approved, is expected to be complete by April 2016.

If the state does not approve of the refueling project, AES said IPL will likely retire the units because it is not economical to install emissions controls on those units to comply with the U.S. Environmental Protection Agency's Mercury and Air Toxics Standards (MATS) rules.

Harding Street is a 1,102-MW oil, coal and gas-fired plant with operating units that entered service between 1941 and 2002, according to federal data. The plant is in Marion County, where Indianapolis, the state capital, is located.

IPL estimated the cost of the Indiana projects as $667 million.

In Ohio, AES said its Dayton Power & Light (DP&L) unit told PJM, the local power grid operator, that it plans to retire the six coal-fired units at the 390-MW Hutchings coal, gas and oil-fired plant in Montgomery County. The six coal units have a capacity of 365 MW.

AES said the 63-MW coal-fired Unit 4 at Hutchings is currently out of service with damage to a turbine and will be retired by June 2013.

DP&L plans to retire units 1, 2, 3, 5 and 6 by June 2015.

DP&L said it investigated converting the Hutchings units from coal to gas but said the cost of investment exceeded the expected return.

The Hutchings units entered service between 1948 and 1968, according to federal data. The plant is near Miamisburg, about 12 miles (20 km) southwest of Dayton, Ohio.

AES also said DP&L owns about 207 MW of coal-fired generation at Beckjord 6, which is operated by a unit of Duke Energy Corp. The co-owners of Beckjord 6 have told PJM they plan to retire the unit by June 1, 2015.

DP&L said it does not have plans to replace the units that will be retired.