FirstEnergy to Proceed With Deactivation of Hatfield’s Ferry and
Mitchell Power Stations
Washington PA Observer Reporter
13 September 2013
By Bob Niedbala, Staff Writer
WAYNESBURG – FirstEnergy plans to proceed with the deactivation of
its Hatfield’s Ferry and Mitchell power stations Oct. 9 as
originally stated in the company’s announcement of the closings in
FirstEnergy Generation President James Lash testified Friday
before the state Senate Consumer Protection and Professional
Licensure Committee that the company would hold to its plan to
close the two coal-fired plants on that date, eliminating the jobs
of 380 employees.
The company has said it will close Hatfield’s Ferry, a
1,710-megawatt plant in Greene County, and Mitchell, a 370-
megawatt plant in Washington County, because of weak demand, low
electricity prices and the costs of bringing the plants into
compliance with environmental regulations.
The committee hearing, organized by state Sen. Tim Solobay,
D-Canonsburg, and held at Waynesburg University’s Stover Center,
focused on the loss of jobs but also the continued reliability of
electrical services with the loss of the two plants, which
represent 10 percent of FirstEnergy’s total generating capacity.
Lash testified that for the last few years the company has faced a
weak demand for power, as well as market prices at “historic
lows,” partly as a result of the abundance of natural gas.
It also faces the costs of bringing the plants into compliance
with environmental regulations, including the Mercury and Air
Toxic Standards that take effect in 2015.
The company would have to invest $270 million just to bring the
two plants into compliance with MATS and more regulations on power
plant emissions from the Environmental Protection Agency are on
the horizon, Lash said.
Responding to a question from the panel about the impact of the
environmental regulations on the company’s decision, Lash said the
regulations are a factor long term, but even if the regulations
were not part of the equation the plants now remain
Part of the problem is low prices in the PJM capacity auction,
which was created to provide payments to utilities in exchange for
making power capacity available, Lash said. Those payments help
keep existing plants running and encourage development of new
Capacity payments, however, have not been sufficient to offset low
energy prices, he said. The effects of this market “dysfunction”
are not limited to Hatfield’s Ferry and Mitchell, he said.
Asked about a plan the company proposed to investors in March to
convert Hatfield’s Ferry to burn natural gas and coal, Lash said
the company investigated it but found it did not make economic
In response to a question about the company’s willingness to sell
the plants, Lash said no one so far has expressed interest in
FirstEnergy hopes to find employment within the company for at
least 25 percent of the employees who will lose their jobs, Lash
said. Severance packages and assistance in finding new employment
will be provided those who aren’t retained, he said.
The closing of the plants is currently being reviewed by PJM
Interconnect, a not-for-profit corporation that ensured the
reliability of the power grid in Pennsylvania and all or parts of
12 other states.
Andrew Ott, PJM executive vice president, said his corporation is
now completing its review of how the closing will affect the
reliability of the grid, but it appears the need to ask
FirstEnergy to continue operating the plants beyond Oct. 9 would
be “very limited” and would only need to address potential
problems on the hottest days of the year when electric use is at
Ott spoke of the dramatic shift in power generation from coal to
natural gas, noting natural gas now represented about 19 percent
of generation in PJM’s area. By 2018, natural gas could represent
40 percent of the generation, he said.
Asked about the recent increase in importing power into the PJM
area from power plants in other state, Ott said PJM is required to
open its markets by interstate commerce laws but the amount of
power Pennsylvania now imports is very small. Pennsylvania remains
an exporter of power, he said.
Members of the panel expressed concern about what the closings of
the plants might mean in terms of the costs of electricity to
local homeowners as well as the removal of coal from the nation’s
energy mix as the nation seeks energy independence.
Robert Powelson, chairman of the Public Utility Commission, also
spoke and expressed concerns not only about the loss of jobs but
also the impact the plant closings would have on the reliability
of the electrical grid.
Powelson said he had requested a meeting with Gina McCarthy, EPA
administrator, to discuss options regarding compliance with
environmental standards that could keep the plants operating
He also noted the $650 million FirstEnergy’s predecessor,
Allegheny Energy, had spent to install scrubbers on Hatfield’s
Ferry in 2009 would not be paid by FirstEnergy customers but by
the company’s shareholders.
Robert T. Whalen, president of the Utility Workers Union of
America, Local 102, said for years Hatfield’s Ferry has been a
“cornerstone” of the grid and the company should consider selling
the two plants if it no longer wants to operate them.
Whalen said independent investor groups have been purchasing
coal-fired plants and he knew of one group that might be
interested in Hatfield’s Ferry.
Whalen also said that for years the company has done little to
ensure reliability on the distribution side of the business and
some of the workers losing their jobs at the plant could be
employed on the distribution side as linemen and substation
He also suggested the state take a hard look at whether the
deregulated utility industry best serves the public interest. It
may be that ensuring reliable and cost-effective power may require
returning generation to a regulated entity under control of the
PUC, he said.