Dive Brief:
- FirstEnergy announced that next year it will sell or close the 1,300 MW coal-fired Pleasants Power Station in West Virginia, though neither option was the company's first choice and officials called it "a very difficult choice."
- Today, through its subsidiary Allegheny Energy Supply, FirstEnergy informed PJM Interconnection of its plan to "deactivate" the plant. The grid operator must review the potential reliability impacts of closing the plant.
- Mon Power, a FirstEnergy subsidiary in West Virginia, had proposed acquiring the plant, but the Federal Energy Regulatory Commission denied the deal, and West Virginia regulators attached enough conditions to kill the deal.
Dive Insight:
FirstEnergy had proposed transferring the plant from one subsidiary to another, prompting federal regulators to worry about cross-subsidization issues. Regulators in West Virgnia would have allowed the deal, but FirstEnergy said they attached too many conditions for it to remain viable.
"Closing Pleasants is a very difficult choice," FirstEnergy President and CEO Charles Jones said in a statement. "But the recent federal and West Virginia decisions leave FirstEnergy no reasonable option but to expeditiously move forward with deactivation of the plant."
As the company prepares to shutter Pleasants, it will simultaneously look for potential buyers. Mon Power, a FirstEnergy subsidiary in West Virginia, is facing a capacity shortfall that will approach 1 GW within the next 10 years, according to its integrated resource plan accepted by West Virginia regulators in 2016. The utility expects it will need 700 MW by 2020 and 850 MW by 2027, and had proposed acquiring Pleasants to meet the shortfall.
While FirstEnergy argued the deal would fall into a "safe harbor" envisioned by the Federal Power Act, FERC wasn't buying it. The commission said the utilities "have provided no evidence that any ratepayer protections regarding cross subsidies are proposed in the proceeding before the West Virginia Commission."
