MONONGAHELA – FirstEnergy will close two coal-fired power plants in the Mon Valley as scheduled next week with no expectations the company will sell or ever reopen them under stricter federal clean-air regulations and other issues changing the electricity market.
FirstEnergy President James H. Lash said the company has made jobs offers within its system to 140 of 175 union workers affected by the Wednesday deactivations of the Mitchell Power Station in Washington County and the Hatfield plant in Greene County.
“We have not had anyone approach us with a proposal to purchase them,” Lash testified Thursday before the state House Consumer Affairs Committee at a hearing it held in Monongahela on the reliability on the electric grid after the power plants close.
“We are not out there seeking to sell. We know what the market is, what the offers would be. We would turn our head,” Lash said at the hearing in Monongahela Fire Hall chaired by state Rep. Peter J. Daley, D-California.
FirstEnergy met the requirement to give the electric grid oversight group, PJM Interconnection, a 90-day period to review the reliability of service before the stations are retired when it announced the plant closings July 9, said Pamela A. Witmer, a member of the state Public Utility Commission.
While PJM determined the grid will not be threatened by the plant closings, Witmer testified she had concerns about 90 days being enough time to test the future reliability of electricity with the loss of 2,000 megawatts of power, which help to supply 1.5 million Pennsylvania homes a year.
“That’s the bare minimum,” she said. “Did PJM have sufficient time to examine all of the reliability concerns closely?”
Michael J. Kormos, executive first vice president of operations at PJM, said there will be enough energy supplied by new natural gas-fueled power plants within the large grid to compensate for any coal-fired plants scheduled to retire.
“We are very confident these units can retire,” Kormos said.
The Hatfield and Mitchell stations employ 380 workers, and union workers there who secure other jobs within FirstEnergy are being asked to take concessions during current labor negotiations, said Thomas Hall, executive vice president of Utility Union Workers of America Local 102, which represents workers at the plants.
“There is no reason even one person has to a lose a job,” Hall said.
He questioned the motivation for closing the stations after the company already spent more than $700 million to improve their pollution controls.
“Closing plants is never an easy decision and it’s not a decision we take lightly,” Lash said.
He said the plants are losing money now at a time when demand for electricity is flat and coal faces growing competition from the low price of natural gas because of the boom of drilling into the Marcellus Shale formation.
“We don’t see the demand for electricity picking up. The economy has not been robust since 2008,” Lash testified.
He said the industry is uncertain about how the new federal Environmental Protection Agency regulations will affect coal in years to come as an energy source at a time when both plants need to spend $270 million on upgrades to comply with the pending rules.
“That’s a lot of money,” Lash said, adding the investment would cause additional loses if the plants were to be kept open.
Daley said he planned to form a delegation to travel to Washington, D.C., to meet with federal lawmakers on ways to protect the coal economy in Pennsylvania.
“The ripple affect here is cataclysmic,” Daley said.
State Rep. Pam Snyder of Greene said 40 percent of that county’s budget is made up from revenues from the coal industry.
“This story is bigger than this,” said Snyder, D-Jefferson.