Dive Brief:
- PPL Corp. announced this week that it will shutter two older coal-fired units in Kentucky totaling more than 270 MW, the result of energy efficiency and more stringent regulations.
- Louisville Gas and Electric and Kentucky Utilities, subsidiaries of PPL, have already mothballed six units in the last five years. The Brown 1 and Brown 2 units are among the utilities' most expensive resources, they said.
- A 409 MW coal unit will continue operating at the E.W. Brown power plant, located in Harrodsburg, Ky. Also generating electricity at the plant are solar and hydro facilities, and seven gas-fired turbines which can generate more than 900 MW at peak demand.
Dive Insight:
Kentucky Utilities announced the closures this week, pointing to energy efficiency measures and more stringent emissions controls as the reasons. The utility said it analyzed "a number of alternatives" to meet stricter regulations, including the Coal Combustion Residuals rule, but concluded it did not make financial sense to upgrade the plant.
“We are continually looking for opportunities to reduce costs for customers while maintaining a reliable supply of energy,” Paul Thompson, LG&E and KU president and COO, said in a statement. “Retiring two of our oldest and most expensive coal-fired generating units, while also avoiding more costly environmental capital expenditures for compliance, benefits our customers.”
The units have been operating for decades. Brown 1 began commercial operation 1957 and has a generation capacity of about 106 MW. Brown 2 began commercial operation in 1963 and has a capacity of about 166 MW.
"They are already the most expensive units in the company’s coal fleet to operate and maintain on a dollars-per-megawatt of generation basis," the utility said. And, "given their age and relatively smaller size, it would not be financially prudent to invest millions of additional dollars to meet the CCR rule."
In recent years, the utilities have retired a half dozen other units. Tyrone Generating Station was retired in 2013, Cane Run generating units 4, 5 and 6 were retired in the summer of 2015, and Green River units 3 and 4 were retired later in 2015.
No employees will be let go as a result of the closings. Several generating assets will remain at the E.W. Brown facility, including a 409-MW coal unit, solar and hydro resources, and seven gas-fired combustion turbines capable of producing more than 900 MW at peak times.
While more stringent regulations are behind many coal closures, the Trump Administration has been working to change that. Earlier in the fall, the U.S. Environmental Protection Agency indicated it would reconsider portions of the Obama-era CCR. Power generators asked the EPA earlier in the year to reconsider portions of the 2014 rule. EPA did not commit to rewriting any portion, but said in a release that it is in the "public’s interest to reconsider specific provisions."
Meanwhile, the Energy Department and the Federal Energy Regulatory Commission is also examining a proposed rulemaking that would support struggling baseload plants (i.e. coal and nuclear) in wholesale power markets. Former acting FERC Chairman Neil Chatterjee revealed a possible interim plan that could direct RTOs and ISOs to update their tariffs to keep plants online that demonstrate "necessary resilience attributes," or otherwise justify why they could not do so.
