FirstEnergy Corp. has begun sending layoff notices to workers at two Southwestern Pennsylvania coal-fired generating plants even as PJM notified the company it won’t complete transmission upgrades in time for the plants’ scheduled Oct. 9 shutdowns.
FirstEnergy expects to lay off about 380 workers as a result of the closing the 370 MW Mitchell Power Station and 1,710 MW Hatfield’s Ferry Power Station.
However, PJM asked the company in early August to postpone the shutdown, saying it needed more time to complete transmission upgrades needed to maintain reliability in the plants’ absence.
“We are reviewing their request and will be responding to it,” First Energy spokeswoman Stephanie Thornton told RTO Insider last week. “That’s all I can say at this point.”
PJM’s Tariff requires generators to provide at least 90 days’ notice of plant closings to allow the RTO time to evaluate reliability impacts.
Generators that delay shutdowns for reliability reasons are entitled to compensation to recover operating costs. But the Tariff does not give PJM the power to block a plant shutdown.
PJM spokeswoman Paula DuPont-Kidd said PJM will provide details on the upgrades needed when it completes its review.
FirstEnergy President and CEO Anthony Alexander told analysts on an Aug. 6 earnings call that neither plant cleared the last PJM capacity auction and that some of the individual units hadn’t cleared the auctions for several years. Alexander said the plant closings, which were hastened by environmental regulations, are part of a company-wide cost-cutting plan, which includes an additional 250 layoffs and reductions in medical and other benefits.
FirstEnergy said the two plants represented 10% of its generating capacity but about 30% of its cost to comply with the EPA’s mercury and air toxics standards (MATS). The closure will reduce FirstEnergy’s MATS compliance costs to $650 million from $925 million.
PJM asked FirstEnergy last year to continue operating three Ohio coal-fired power plants slated for closure, the Ashtabula, Lake Shore and Eastlake plants. The company agreed to keep those plants running until early 2015 under “reliability must-run” rules while it installs new transmission lines to maintain reliability.
