Dive Brief:

• PJM Interconnection has cleared FirstEnergy to deactivate a pair of coal-fired units in West Virginia at the beginning of next year, finding no impacts to reliability or grid stability.
• Last month, FirstEnergy announced it would close the 1,300 MW coal-fired Pleasants Power Station in 2019 if it is unable to find a buyer.
• FirstEnergy originally wanted to keep the plant operating by transferring it from one subsidiary to another, federal regulators balked and state authorities placed conditions on the transaction and forced company officials to make what they called "a very difficult choice."

Dive Insight:

PJM Interconnection reviewed FirstEnergy's request to deactivate the Pleasants Power station and found no grid impacts, clearing the way for closure by Jan 1. 2019. The plant began operating in 1979. A spokesperson for the company told West Virginia Public Broadcasting that unless a buyer is found, the plant will continue to operate normally until the end of the year and then close.

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. 

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.

Federal regulators indicated they were concerned with cross-subsidization issues. At the time of its decision, the agency said the utilities "have provided no evidence that any ratepayer protections regarding cross subsidies are proposed in the proceeding before the West Virginia Commission." 

Regulators in West Virginia would have allowed the deal, but FirstEnergy said they attached too many conditions for it to remain viable.