Dive Brief:
- FirstEnergy announced last week that it will not shutter its 1,300 MW coal-fired Pleasants Power Station in West Virginia next year as previously announced, and the plant will instead continue operating into 2022.
- The change is part of the bankruptcy proceeding to the company's unregulated generation subsidiary FirstEnergy Solutions (FES). The plant, owned by FirstEnergy subsidiary Allegheny Energy Supply, will remain operating until it is transferred to FES' creditors to give them more time to make decisions about its future.
- FirstEnergy called shuttering the plant "a very difficult choice" in its announcement earlier this year. Another FirstEnergy subsidiary, Mon Power, attempted to acquire the plant but federal regulators rejected the deal.
Dive Insight:
In a reversal of recent trends, a large coal plant in West Virginia has gotten a new lease on life — though the extension has more to do with complicated bankruptcy proceedings than a sign of the fuel's resurgence.
The deal was approved by the bankruptcy court in September, extending the date of decommissioning, FirstEnergy spokeswoman Jennifer Young told Utility Dive. However, "a transfer date has not yet been set," she said.
Once the facility is transferred to FES, the company and its creditors can make a decision on whether to keep it running, said Young. And with the Point Pleasant station remaining open, it will also be able to meet capacity obligations in the PJM Interconnection market.
In August, FES notified PJM Interconnection of its intention to shut down four fossil fuel plants in Pennsylvania and Ohio in 2021, including 4 GW of coal capacity.
FES filed for Chapter 11 bankruptcy protection in March. Recently, a bankruptcy court judge in Ohio approved a settlement between FirstEnergy and the unregulated generation subsidiary, calling for the parent company to make a payment of $225 million to FES and issue $628 million in notes for the subsidiary.
Republican West Virginia Gov. Jim Justice issued a statement celebrating the Pleasants Station news and pointing to his work with President Trump, Energy Secretary Rick Perry, FirstEnergy CEO Chuck Jones and others, "to make sure this plant stays open."
About 160 people work at the plant.
"While the plant will remain operational until June 2022, today’s announcement will provide a cushion for First Energy Solutions to stabilize the operation," Justice said. "I am hopeful that over the next three and a half years a permanent fix for the long-term operation of the facility will be reached."
While the Trump administration has touted its work to revitalize the coal industry, it has had little success so far. A plan hatched by the Department of Energy to keep coal and nuclear plants from closing has not yet been pushed forward by the White House.
FirstEnergy's decision to keep the plant open breaks with a recent trend of closures and announcements. American Electric Power last month said it will retire its 680 MW Oklaunion coal plant in 2020 because it cannot compete with cheaper power from gas and renewables.
