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Coal plants in Massachusetts, New Jersey to shut for good June 1

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Coal plants in Massachusetts, New Jersey to shut for good June 1

The largest coal-fired power plant in New England and two large New Jersey coal plants will close permanently June 1.

Dynegy Inc. is closing its roughly 1,528-MW coal- and oil-fired Brayton Point plant in Somerset, Mass. Public Service Enterprise Group Inc. is following suit with the permanent retirement of its 620-MW Hudson 2 plant in Jersey City, N.J., and 632-MW Mercer plant in Trenton, N.J. In all, nearly 2,800 MW are being taken off the grid.

David Onufer, a spokesman with Dynegy, blamed low electricity prices brought on by cheap natural gas and high maintenance costs for making the Brayton Point plant no longer profitable to run.

Onufer noted that the decision to close the plant was made before Dynegy acquired the facility in January 2014 from Energy Capital Partners. The controversial October 2013 decision by Energy Capital Partners to close Brayton Point, just a month after acquiring the facility from Dominion Energy Inc., sparked accusations of market manipulation by withholding capacity to significantly boost prices in a forward capacity auction.

The Brayton Point retirement is among a number of New England coal, oil and nuclear generators whose retirements ISO New England President and CEO Gordon van Welie expressed concerns about in an October 2016 interview. The head of the regional grid operator fears that New England is heading toward an energy crunch brought on by the plant retirements, wintertime natural gas pipeline constraints and growth of intermittent renewables.

Brayton Point consists of three coal-fired units, all of which began operating in the 1960s, and an oil-fired unit, being retired as well, that began operating in 1974.

In New Jersey, PSEG subsidiary PSEG Power LLC is closing the Hudson and Mercer plants "strictly due to the economic impact of low-priced natural gas, and not because of environmental regulations," spokeswoman Melissa Ficuciello said. The PSEG Power board voted to shutter the plants in October 2016 after the facilities failed to clear two PJM Interconnection capacity auctions.

According to The Associated Press, the Mercer plant, which began operations in 1960, has been inactive for 17 months apart from two days of operations in January. Hudson 2 came online in 1968. Their closures have already cost PSEG $555 million in losses in 2016 and the company expects to write off up to $960 million in 2017, following a $940 million write-off in 2016, Ficuciello said.

PSEG Chairman, President and CEO Ralph Izzo said in February that coal will make up 7% of PSEG Power's generation mix once Hudson 2 and Mercer are taken offline, while natural gas is expected to make up about 30% and nuclear about 63%. Most of PSEG's coal portfolio comes from stakes in two western Pennsylvania plants, Keystone and Conemaugh; while PSEG's remaining coal plant, Bridgeport Harbor 3 in Fairfield, Conn., is slated to shutter in 2021.

PSEG is in the process of replacing the capacity from the Bridgeport Harbor, Hudson and Mercer coal plants with three new natural gas-fired combined-cycle plants: the 755-MW PSEG Keys Energy Center (KEC) in Prince George's County, Md., the 540-MW Sewaren Gas Power Plant in Middlesex County, N.J., and the 485-MW Bridgeport Harbor Station Combined Cycle Project at the current site of the existing Bridgeport Harbor plant. The Keys Energy Center and Sewaren projects are expected to be completed in spring 2018 while the new Bridgeport Harbor project is slated for spring 2019, Ficuciello said.