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FirstEnergy: Hatfield's Ferry similar to Harrison, but too expensive to run

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Citing the cost of environmental compliance and a weak market for electricity, FirstEnergy announced July 9 that it expects this fall to deactivate two coal-fired power plants in Pennsylvania.

The company's southwest Pennsylvania Hatfield's Ferry and Mitchell power stations — not to be confused with AEP's Mitchell Power Station in West Virginia — have been scheduled for closure, subject to a review for possible grid reliability implications.

Both are owned by FirstEnergy's competitive subsidiary Allegheny Energy Supply.

Together, the two power stations represent about 10 percent of FirstEnergy's total generating capacity, according to the company, but about 30 percent of the estimated $925 million cost to comply with the Environmental Protection Agency's Mercury and Air Toxics Standards, or MATS.

Mitchell is an older power plant with less than 400 megawatts' capacity.

But Hatfield's Ferry is larger and more modern. Constructed about 1970, it has a capacity of about 1,700 MW and uses current supercritical technology. The completion of its scrubber was announced only a few years ago, in 2010; the shared cost of the scrubbers at Hatfield's Ferry and Fort Martin power stations was $1.3 billion.

It's similar in size and vintage to the company's Harrison power station near Clarksburg that is not proposed for closure — but there are significant differences, according to FirstEnergy Vice President of Fossil Engineering and Construction George Farah.

"The biggest difference is that Harrison has something called an SCR, selective catalytic reduction, that was a retrofit we put on Harrison and Pleasants stations about 10 years ago," Farah said. "That reduces nitrous oxide but also helps to reduce mercury — so Harrison having an SCR allows us to comply with MATS more cheaply than in Hatfield's case, a plant that does not have an SCR."

In addition, the types of scrubbers the two plants have for reducing sulfur dioxide emissions are different, he said, and that also has implications for future costs.

"The type of scrubber that Harrison has doesn't discharge effluent — it's largely a zero-liquid-discharge type of system," Farah said. "With Hatfield, it does discharge into the river and we have permits for that, but as those regulations get tougher Hatfield may need a wastewater treatment plant that Harrison would not need."

Both plants would have costs in complying with any future limitations on carbon dioxide emissions.

The retirement of Hatfield's Ferry is significant, according to analysts at UBS. 

"While FirstEnergy has announced a number of retirements in recent years, Hatfield's Ferry is the first supercritical, low-heat rate plant, demonstrating just how tough the current environment is for even lower-cost (Northern Appalachian)-coal generators," read a UBS e-mail about the announcement.

"We see today's announcement by FirstEnergy as part of a ‘second wave' of coal plant capitulations in (regional grid manager PJM Interconnection's region)," the e-mail read.

FirstEnergy was reported last fall as considering retrofitting Hatfield's Ferry to burn natural gas in addition to coal, but it has rejected that idea.

The company considered retrofit or conversion at all of its coal plants, Farah said, but found that it is both expensive and creates inefficiencies that undermine any possible cost benefit.

"You'd need new burners, a gas regulation system, gas brought out to the facility, fire protection systems … and ultimately the plant is less efficient," he said. "You would have to have gas even cheaper than it is now for a very sustained period to justify the capital investment. We believe that a plant designed to burn gas is the right way to do it rather than converting a plant that wasn't designed for it."

About 380 plant employees and generation-related positions are expected to be affected by the plant closures. Eligible employees will receive severance benefits through the FirstEnergy plan or as provided by their collective bargaining agreement, the company said.

With regard to the implications for West Virginia coal, Hatfield's Ferry got about 14 percent of its coal from West Virginia in 2012: 530,000 tons from the Prime No. 1 mine run by Morgantown-based coal producer Mepco.

FirstEnergy said its generation fleet after the deactivations would be composed of 56 percent coal, 22 percent nuclear, 13 percent renewables and 9 percent gas or oil, and it would have a generating capacity of more than 18,000 megawatts.

With the deactivation of these two plants, in addition to the nine plants the company announced for deactivation last year, the company said, nearly 100 percent of its power would come from resources that are either non- or low-emitting such as nuclear, hydro, natural gas and scrubbed coal units.

About $650 million the company expects to spend on MATS-related control technology on its remaining facilities will reduce emissions of nitrogen oxides by 84 percent, sulfur dioxide by 95 percent and mercury by 91 percent below 1990 levels.

In addition, the company expects to reduce carbon dioxide emissions 20 to 30 percent below 1990 levels by 2020, almost entirely due to the closures of coal plants, Farah said.

The plant deactivations are subject to review for reliability impacts by PJM.