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Citing market conditions, FirstEnergy plans to shut 3 nukes in PJM region

FirstEnergy Corp. notified the regional grid operator PJM Interconnection of its plans to retire three nuclear plants in the next two to three years due to poor market conditions.

The plans include retiring the 908-MW Davis-Besse and 1,268-MW Perry plants in Ohio in 2020 and 2021, respectively. FirstEnergy also plans to shut the 1,872-MW Beaver Valley plant in western Pennsylvania in 2021, according to a March 28 news release. The plant closures hinge on PJM's review of reliability impacts to the grid.

Don Moul, president of FirstEnergy Solutions Corp. Generation Companies and FirstEnergy's chief nuclear officer, said in the news release the company has taken aggressive measures to cut costs at the plants, but "the market challenges facing these units are beyond their control."

A March 2017 analysis by S&P Global Market Intelligence found that the three plants' operating costs were generally but not always below wholesale power prices. FirstEnergy Solutions, which houses the company's competitive generation assets, has been looking at a restructuring or a bankruptcy filing to exit the competitive power business. Aside from the three nuclear plants, which total more than 4,000 MW, the company has 5,245 MW of coal- and gas-fired assets.

FirstEnergy's retirement plans come as generators are weighing whether to bid their assets into PJM's next auction for long-term capacity. The base residual auction runs from May 10 to 16 and generators that clear the auction are obligated to make their supply available to operate in the 2021/2022 delivery period.

In its news release, FirstEnergy made another plea for help from state lawmakers. "We call on elected officials in Ohio and Pennsylvania to consider policy solutions that would recognize the importance of these facilities to the employees and local economies in which they operate, and the unique role they play in providing reliable, zero-emission electric power for consumers in both states," Moul said. "We stand ready to roll up our sleeves and work with policy makers to find solutions that will make it feasible to continue to operate these plants in the future."

In 2017, FirstEnergy backed legislation proposed in Ohio to offer financial assistance to its nuclear plants, but the legislation failed to pass and Republican Gov. John Kasich opposed subsidies for in-state nuclear plants. A group of Pennsylvania legislators in March 2017 formed a caucus to focus on the challenges facing the state's five nuclear plants, but the caucus has not adopted any policy solutions thus far.

FirstEnergy said in the news release it continues to work toward legislative solutions to keep the three plants operating, but it is also looking for potential buyers for the plants, which together employ about 2,300 employees.

The utility said it has told the U.S. Nuclear Regulatory Commission of its deactivation plans, and will file written notifications within 30 days. It also informed the Institute of Nuclear Power Operations, an organization that evaluates nuclear plant performance, and the industry trade group the Nuclear Energy Institute.

"The two-year-plus lead time is needed to make the complex preparations for a potential plant deactivation, including preparing a detailed decommissioning plan and working with the NRC to amend plant licenses," FirstEnergy staff said. The three plants are currently licensed to operate until 2026 to as far out as 2047 for Beaver Valley unit 2.