PJM says FirstEnergy can shut two Pennsylvania coal plants

Sept 20 Fri Sep 20, 2013 5:22pm EDT

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Sept 20 (Reuters) - U.S. power grid operator PJM Interconnection said on Friday it determined that FirstEnergy Corp can retire its Hatfield's Ferry and Mitchell coal-fired power plants in Pennsylvania without harming system reliability.

PJM, which oversees the power grid in 13 Mid-Atlantic and Midwest states and the District of Columbia, said it told FirstEnergy of its conclusions in a letter dated Sept. 19.

In July, FirstEnergy said it wanted to shut the two plants by Oct. 9 due to weak power market prices and the high cost of complying with stricter environmental rules.

Together, the two plants can generate about 2,080 megawatts, which could power about two million homes.

In the letter, PJM said the retirement of the two plants will impact the transmission system but "those impacts can be handled by transmission upgrades and the implementation of temporary operating measures."

PJM said the Hatfield's Ferry and Mitchell retirements are part of a massive fuel shift underway across the United States with many generation owners retiring coal-fired plants.

Coal-fired generation faces competitive challenges from low natural gas prices resulting from an abundance of shale gas, the cost of complying with environmental regulations, incentives for renewable generation and slow growth in the demand for electricity.

Since President Barack Obama took office in 2009, power companies have already shut or converted about 16,000 MW of coal-fired units as low electricity and natural gas prices have made it uneconomical to upgrade the facilities to keep up with the government's stricter environmental rules.

Generating companies have said they also plan to shut 37,000 MW of coal-fired units over the next 10 years or so.

Hatfield's Ferry's three 530-MW units entered service from 1969-1971. There are two units at Mitchell - a 278-MW coal unit that entered service in 1963 and an 82-MW oil/gas unit that entered service in 1949.

The company said the shutdowns would affect about 380 employees.

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