In Tough Coal Market, WV's Longview Power Plant Strives To Prevail

The State Journal
30 December 2015
By Sarah Tincher, Energy Reporter

It’s been a long, bumpy road for Longview Power, but the company has positioned itself for the path of leadership in the coal-fired power generation sector.

Longview’s $2 billion, 700-megawatt (MW) coal-fired power plant in Maidsville hit turmoil in 2013, just two years after coming online, forcing the company to file for Chapter 11 bankruptcy.

The company has since completed the restructuring process, emerging from bankruptcy in April 2015 with new ownership led by private equity firms KKR, Centerbridge, American Securities and Third Avenue.

Jeffrey Keffer, president and CEO of Longview Power, said being funded through private investments is one aspect of many that sets the Monongalia County plant apart.

“In an industry that is really in some serious trouble right now with all of the coal mining companies going bankrupt and general push toward other types of generation, some major private equity firms recognized that there is inherent value in a modern, advanced coal plant like Longview and made a major investment to acquire and repair it,” Keffer said.

Competitive edge

While some may say it sounds crazy to try to kickstart a coal-fired power plant these days, Keffer said the company’s modern approach is what gives them a competitive advantage.

“In terms of electric production, there’s a great deal of competition going on between natural gas-fired power plants and coal-fired power plants, and here we are with this very modern and very capable plant operating at a level that makes us very competitive, even with the gas plants,” he said.

Trying to retrofit decades-old power plants with scrubbers to reduce their emissions can adversely affect their efficiency, Keffer explained, so starting from scratch made it easier for Longview to build the plant in a clean and efficient way.

“So many other plants operating in this region are at least 40 or 50, some are even 60 years old,” he said. “They were never designed to have the full array of pollution control devices.

“When you start adding on to older plants like that ... you end up adversely affecting their efficiency and you don’t get the same sort of emissions levels you get when you design from scratch,” he added.

Keeping coal in style

In a time when coal is considered by many to be a dirty, outdated fuel source, Longview is making strides at keeping coal in style.

The plant prides itself on being one of the cleanest and most efficient coal plants in the United States, featuring a “baghouse” to filter out emissions and an advanced supercritical boiler that drives the plant’s high efficiency.

“We’re incredibly clean, which has been an issue with coal plants for quite some time,” Keffer said, adding that the plant’s CO2 emissions are 15 percent lower than the average coal plant.

Most recently, the company announced the completion of its 21-day reliability test, which ran from Nov. 17 through Dec. 8, that revealed the plant achieved a 99.5 percent equivalent availability factor — the power industry’s measure of reliability — while operating at 703 MW (net).

“We expect the plant to operate in excess of 90 percent from here on out,” he said.

As coal industry layoff notices continue to make headlines throughout the state and nation, Longview Power and its affiliates provide jobs to 500 people altogether, as the company also supplies the power plant through its own coal mines.

Controlling its destiny

Mepco Holdings, which is under common ownership with Longview, operates three mines just across the border in Greene County, Pennsylvania. They supply the plant with coal through a conveyor connecting the complexes.

“It’s a fully integrated operation,” Keffer said.

While the company has some fears, Keffer believes this feature will allow the plant to survive the storm brought on by a diving coal market and stringent regulatory measures.

“There are plenty of things that keep me up at night but we are not worried about the coal market because we control our destiny by operating our own coal mines,” he said. “We are concerned and remain concerned about power prices. They’re awfully low. We’re doing fine but it’s causing some difficulties for our neighbors.

“I think we’ll be in a position to be able to ride through it and continue to operate for many, many years to come,” he added.