FirstEnergy Corp. will shut two coal-fired power plants in Pennsylvania by Oct. 9 due to weak power prices and the high cost of complying with stricter environmental rules, the company said on Tuesday.
In a federal filing, FirstEnergy said it would recognize an impairment charge of about $488 million ($321 million after tax) in the second quarter of 2013 for the shutdowns.
The plants are Hatfields Ferry in Masontown and Mitchell in Courtney, FirstEnergy said in a release. It expects the shutdown of the two plants to affect about 380 employees.
Together, the company said the plants could generate 2,080 megawatts, about 10 percent of its total capacity. One megawatt can power about 1,000 homes.
FirstEnergy said it would cost about $275 million to install the equipment at the two plants to comply with the U.S. Environmental Protection Agency's Mercury and Air Toxics Standards.
Since President Barack Obama took office in 2009, about 15,000 MW of coal-fired power plants have closed as low electricity and natural gas prices have made it uneconomical for generating companies to upgrade those facilities to keep up with the government's stricter environmental rules.
Those generating companies have also announced plans to shut more than 37,000 MW of coal-fired units over the next 10 years or so.
FirstEnergy said it expected to invest about $650 million in mercury-related control technology to enhance or modify existing air quality equipment or install new equipment on its remaining facilities.
After these upgrades, FirstEnergy said it expected to reduce emissions of nitrogen oxides by 84 percent, sulfur dioxide by 95 percent and mercury by 91 percent below 1990 levels. In addition, the company expects to reduce carbon dioxide emissions 20 percent to 30 percent below 1990 levels by 2020.
The shutdown of the two plants is subject to review for reliability impacts by PJM Interconnection, which operates the power grid serving 61 million people in 13 U.S. mid-Atlantic and Midwestern states and the District of Columbia.
After those closings, FirstEnergy will still operate a fleet of power plants with combined generating capacity of more than 18,000 MW, it said. Of that, 56 percent will be from coal, 22 percent from nuclear, 13 percent renewable and 9 percent gas and oil.
Hatfields Ferry's three 530 MW units entered service from 1969-1971. There are two units at Mitchell, a 278 MW coal unit that entered service in 1963 and an 82 MW oil/gas unit that entered service in 1949.
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