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Cold winter won't save aging WV power plants

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JIM ROSS / The State Journal JIM ROSS / The State Journal
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By JIM ROSS
jross@statejournal.com

The CEO of one the nation's largest coal mining companies suggests that this year's cold winter could save some aging coal-fired power plants from their scheduled retirements next year.

But the owners of the plants in West Virginia and near its borders say that won't happen here.

Kevin Crutchfield, chairman and CEO of Alpha Natural Resources, told analysts Feb. 12 that there has been speculation that the closing of some older, smaller plants may be delayed because of concerns over the reliability of regional electrical grids.

"These concerns are real, as some of the Midwestern and Eastern utilities have requested consumers to conserve energy during the past month," Crutchfield said during a conference call with analysts.

"We don't know what the ultimate outcome might be, nor the magnitude of potential delays," he said. "However, it's encouraging that electrical generators and grid operators are focusing on the critical role of coal-fired generation and maintaining a reliable energy supply. 

"We also see that many utilities have not only been bringing coal generation back online, they are running it at full capacity."

During his company's most recent conference call with analysts late last month, American Electric Power CEO Nick Akins said 89 percent of his company's coal-fired capacity that is slated for retirement in mid-2015 was running during this unusually cold winter.

But AEP is not changing its plans to retire several plants early next year, including the Philip Sporn plant in Mason County and the Kanawha River plant at Glasgow in Kanawha County.

"Nothing has changed about our plant retirement schedule," Melissa McHenry, director of external communications for AEP, said when asked about Crutchfield's and Akins' remarks. "Coal-fueled plants that will be retired cannot run after mid-2015 and be in compliance with the EPA MATS rule, so they must be retired by that time.

"Eighty-nine percent of the plants we plan to retire did run during the recent cold weather in January. In regulated states like West Virginia, our integrated resource planning process will ensure that we have adequate generation to meet our customers' needs after the retirement of the generation owned by Appalachian Power — which is one of the reasons that we sought to transfer ownership of the Mitchell Plant to Appalachian Power."

McHenry said in competitive states, such as Ohio, the situation is a little different.

"Not much generation is being built because the market prices are so low," she said. "We've been talking with PJM (the regional transmission organization) and with lawmakers and regulators in Washington to ensure that the market structures and value placed on generation is such that adequate generation available meet peak load periods.

"We've also been working to gain support for transmission investments that can help reduce the need for additional generation in peak periods."

AEP is the parent company of Appalachian Power, which serves most of southern West Virginia, and Wheeling Power.

FirstEnergy, which owns the operating companies that supply most of northern and eastern West Virginia, likewise is not altering its retirement plan for coal-fired plants because of this winter, said Stephanie Walton, senior communications representative.

"Of the 11 plants FirstEnergy has announced for closure, only three have been kept open temporarily under reliability must-run (RMR) agreements with PJM, the regional grid operator," Walton said. "Those three plants are all located along Lake Erie and were expected to operate until early 2015. 

"However, PJM recently determined that two of those plants (Eastlake and Lake Shore) can close in September of this year without any impacts on reliability. The remaining plant (Ashtabula) is still scheduled for closure in early 2015. 

"The other eight plants have closed as scheduled, including three in West Virginia, after PJM determined their deactivation would have no impact on reliability."