The generation units cleared the base residual auction for the 2018-2019 delivery year and the transition auctions for the 2016-2017 and 2017-2018 delivery years.
The outcome was especially good news for FirstEnergy’s 2,233-megawatt Sammis plant in Stratton, Ohio. Sammis, located along the Ohio River and the Akron-based company’s largest plant in Ohio, has been at risk for possible closing. The plant is part of the approximately 3,100 megawatts of coal and nuclear generation capacity the company is seeking to continue operating under a controversial power purchase agreement (PPA) pending before the Ohio Public Utilities Commission (PUC).
The PPA also includes the 908-megawatt Davis-Besse nuclear plant in Ohio and FirstEnergy’s roughly 200-megawatt share of Ohio Valley Electric Corp.’s (OVEC) Kyger Creek and Clifty Creek coal plants in Ohio and Indiana, respectively. Together, Kyger Creek and Clifty Creek produce almost 2,400 megawatts of electricity. OVEC was formed in the 1950s to provide electricity to the old U.S. Atomic Energy Commission. A final PUC decision on the purchase plan is expected before the end of this year or in early 2016.
Also clearing the PJM auction was FirstEnergy’s largest plant, the 2,741-megawatt Bruce Mansfield facility in Shippingport, Pennsylvania. The company is pursuing the construction of a new coal ash disposal facility at Mansfield.
A FirstEnergy spokesman said his company was pleased with the auction results, saying they “come closer to reflecting the true operating costs of our generating plants.” PJM, based in Pennsylvania, includes 13 states and the District of Columbia.
AEP, meanwhile, said more than 7,000 megawatts of its unregulated generation fleet in PJM cleared the capacity auction for the 2018-2019 delivery year, representing all of the capacity its AEP Generation Resources subsidiary bid into the auction. AEP Generation Resources, the company’s competitive arm, has 7,923 megawatts of mostly coal-burning generation resources. The auction had a clearing price of $164.77/megawatt per day and was the first held under PJM’s new capacity performance system designed to encourage investment in power plants and strengthen grid reliability.
Nicholas Akins, AEP chairman, president and CEO, said PJM’s market design improvements “are a step in the right direction to help support the investments needed for reliable generator performance. These higher auction prices for the next three years better reflect the value of reliable generation to meet peak electricity demand.”
AEP has a similar power purchase agreement before the PUC that covers about 3,000 megawatts of coal-burning generation. Tammy Ridout, an AEP spokeswoman, said the Columbus, Ohio-based company’s portion of the Stuart and Zimmer coal plants in Ohio did not clear the 2017-2018 supplemental auction, though they did clear the original base auction for 2017-2018. Stuart and Zimmer are jointly owned with other electric utilities and are not operated by AEP.
AEP’s portion of Stuart and Zimmer also cleared the 2016-2017 supplemental auction and the 2018-2019 base residual auction. AEP is one of the largest coal consumers in the nation, burning more than 40 million tons of steam coal annually. The company has retired more than 6,000 megawatts of coal capacity in the past couple of years, mainly to comply with new federal Environmental Protection Agency rules.
East Kentucky Power Cooperative, a Winchester-based generation and transmission co-op, also cleared in the PJM auctions all of the more than 1,600 megawatts of coal generation it intends to keep operating for the foreseeable future. That includes the 1,279-megawatt Spurlock and 341-megawatts Cooper plants.
