Dayton Power and Light Co., a subsidiary of AES Corp., came to an agreement with the Sierra Club on Jan. 30, stating its desire to retire the Killen Station and J.M. Stuart coal plants.
However, for the proposal to be ultimately accepted, other owners of the plants, Dynegy Inc. and American Electric Power Co. Inc., must also sign off on the retirement plan.
J.M. Stuart is jointly owned at the ultimate parent level by Dynegy, AES and American Electric Power. These entities own 900 MW (39%), 808 MW (35%) and 600 MW (26%) of the capacity, respectively. The plant's first unit started operating in 1970. The DP&L proposal would place the plant's retirement age at 48 years, three years below the average age of coal plant retirements from 2000 to 2016.
J.M. Stuart reported fuel deliveries on the 2016 EIA 923 filing from five mines: Cumberland, Mine No. 1, River View, The American Coal Company New Era Mine and Tunnel Ridge. These mines are in the Central Appalachia, Illinois Basin, and Northern Appalachia regions.
Killen Station is jointly owned at the ultimate parent level by Dynegy and AES, with AES owning the majority of capacity at 402 MW, or 67%. The plant had its first unit become operational in 1982. If the plant is retired in 2018 as proposed, it would retire at an age of 36 years, 15 years below the average age of coal plant retirements from 2000 to 2016.
Killen Station had EIA 923 reported deliveries from four of the same mines as J.M. Stuart in 2016, all but Cumberland. Alliance Resource Partners LP, Contura Energy Inc. and Murray Energy Corp. owned the mines reported to have delivered to the plants in 2016.
The plants being unable to compete due to economic factors was cited as a main reason for the proposed retirement, according to Dan Sawmiller, senior campaign representative for the Sierra Club's Beyond Coal Campaign in Ohio. The Sierra Club reached an agreement in principle with DP&L on the settlement proposed to Ohio regulators.
"While this settlement is still subject to approval by the [Public Utilities Commission of Ohio], we believe it meets our goals of providing the company an opportunity to achieve the credit metrics necessary to establish financial stability," DP&L President and CEO Tom Raga said in a statement.
The average price of power at PJM Interconnection's AEP-Dayton Hub in 2016 was $27.46/MWh. This falls below the two plants' modeled operation and maintenance expenses for 2016 of $29.64/MWh for Killen Station and $31.56/MWh for J.M. Stuart. These operation and maintenance expenses were modeled using SNL Energy's unit level production cost model, the Generation Supply Curve. SNL Energy is an offering of S&P Global Market Intelligence.