On April 3, Homer City Generation, L.P. informed PJM Interconnection on March 31 it will decommission all of its Homer City coal units, with operations winding down over the next ninety (90) days.  Homer City will see tiered layoffs as a result.  

Homer City based its decision on several factors including the low price of natural gas, a dramatic spike in the cost of its ongoing coal supply, unseasonably warm winters and increasingly stringent environmental regulations. 

The most recent emissions limits imposed by the Federal Implementation Plan on the Pennsylvania coal-fired generation industry impose an excessive economic and operational burden. 

On top of all these real challenges, Homer City faces the ongoing uncertainty surrounding  Pennsylvania’s long stated intention to join the Regional Greenhouse Gas Initiative (RGGI). 

RGGI will severely limit Homer City’s ability to plan long term and it will handcuff the business in making further investments with an uncertain regulatory future.

[Note: Homer City warned a year ago it would make a decision by April 4 on whether to remain open based on several factors-- “ongoing operating performance; the ability to support a one- or two-unit operation; ongoing maintenance and operating costs; forward power and coal prices; availability of coal supply; and regulatory uncertainties – including those related to the RGGI.”  Read more here.]

Anya Litvak at the Post-Gazette reports there is a 230 MW solar energy project and others waiting to fill the gap left by the closure and take advantage of Homer City’s PJM grid interconnection rights.  Read more here.

“This is an unfortunate day for us at Homer City because we did everything possible to maintain our operations,” said Homer City President and CEO William A. Wexler. “Everyone at Homer City was committed to helping power our community and no one embodied that commitment more than our workers.  We will continue to look to utilize all of Homer City’s hard assets, including its existing infrastructure, to find a higher and better use(s) to continue to support the community.”  

Homer City was the largest coal-fired power plant still operating in Pennsylvania at 1,915 MW. 

The two other large coal-fired plants-- Conemaugh (1,700 MW) and Keystone (1,700 MW)-- announced tentative plans to close in 2028.  A fourth plant-- Montour (1,504)-- announced plans to stop burning coal in 2025.

That leaves just eight smaller waste coal-fired and coal-fired power plants in Pennsylvania connected to the PJM grid, the largest being the Seward Waste Coal Plant (521 MW).

Over the last two decades, more than 60 coal electricity-generating units have closed in Pennsylvania due to competition with natural gas.

First opened in 1969, Homer City Generating Station is located 50 miles from Pittsburgh and is the largest coal plant currently operating in Pennsylvania. The current ownership group took over in April 2017.

Reactions

Senate Majority Leader Joe Pittman (R-Indiana) issued this statement on the Homer City announcement-- “For almost six decades, the Homer City Power Plant has served our community and the entire region very well. The news of this facility closure is extremely difficult to accept, and my hope is it will ultimately not occur.

“However, as we are faced with an uncertain future, we will move forward together and support the families affected by the loss of these good, family sustaining jobs.

“I am steadfast in my commitment to working with my colleagues locally, in Harrisburg, and in Washington, D.C., to support the local community and invest in needed resources to make the Homer City site as productive as possible for future economic opportunity.

“This is a challenging day, but we are a strong community and will weather this storm together.

“The impacts of this closure will be felt by communities throughout Indiana County and the entire region in Western Pennsylvania. Beyond our area, this troubling news is a realization that we as a nation are at risk of losing the reliability of our power grid.

“Removing this source of electricity production from our power grid will certainly not help to keep down costs for consumers. We must continue to advance initiatives that create greater energy independence for our Commonwealth.”

The PA Coal Alliance issued this statement on the closure of Homer City--  “Poor policy decisions, including the mere threat of Pennsylvania joining the RGGI carbon tax scheme, coupled with serious flaws in PJM's capacity market have led to unfortunate realities like the closure of Homer City.

“PJM recently acknowledged significant grid failure concerns as it increasingly relies on sources that do not have on-site fuel, and when needed most do not perform when called upon. The retirement of reliable and resilient baseload coal-fired generation will only compound the challenges the grid will have in the future.”

PennFuture issued this statement on the Homer City closure-- "Western PA coal plan decommission shows fossil fuel proponents have no plan B for their communities.

“Instead of recognizing the market shift and preparing for the transition to clean, renewable generation, fossil-fuel-friendly legislators have spent years in denial.

“Homer City Generation LP in Western Pennsylvania announced it plans to decommission its coal units in 90 days—the last of the state’s traditional coal-fired plants to announce closure plans.

“This action followed a tumultuous run that included a bankruptcy filing in 2017 to erase its $600 million debt.

“Although coal was once the cheapest power generation source in Pennsylvania, that was years ago.

“Today, these legacy plants have been unable to compete with cheaper generation from fracked gas and, increasingly, clean renewable generation. It simply costs more to dig up and crush coal than it is to replace plants with cleaner alternatives.

“Rather than recognizing that this shift in the market was underway and preparing for the transition to clean, renewable generation, fossil-fuel-friendly legislators have spent years in denial.

“When Governor Wolf proposed joining the Regional Greenhouse Gas Initiative (RGGI), legislators had the opportunity to direct proceeds from that program to support communities and workers impacted by the failure of fossil fuel plants.

“Instead, legislators have put all their effort into opposing RGGI as if doing so would make these plants profitable again.

“If it wasn’t already clear that the failure of these plants had nothing to do with RGGI, which has still not been implemented in Pennsylvania, today’s announcement should end that argument.

“The last of our traditional coal-fired plants announced plans for its closure, no new coal construction is underway in the state, and no one has announced plans to build new coal plants.

“Homer City joins hundreds of coal plants around the country closing in part because they cannot compete against cheaper energy sources such as natural gas and renewables.

“Market forces and poor management by industry have left the region and its 129 impacted workers with no alternatives.

“RGGI represents a path forward that allows communities to transition from failing coal plants and have a say in what their future looks like by providing dollars to support the towns abandoned by these plants.

“Yet by choosing to fight RGGI for over a year, Pennsylvania lawmakers prevented helpful funds from being collected.

“The coal industry has been dying for decades. Instead of fighting to keep a single polluting coal plant open for maybe an additional 365 days, Western Pennsylvania lawmakers could invest in supporting renewable energy job creation and job training.”

Upcoming Event:

-- Washington & Jefferson College Hosts April 5 Webinar On Justice40 - Bringing Energy Transition Benefits To Disadvantaged Communities  [PaEN] 

-- AP: Biden Offers $450 Million For Clean Energy Projects At Coal Mines

NewsClips:

-- Post-Gazette - Anya Litvak: Homer City Coal Power Plant, The Largest In PA, Will Close By June, Solar Energy Projects Waiting To Fill Gap

-- Indiana Gazette: Homer City Power Plant To Be Idled In June

-- Pittsburgh Business Times: Homer City, One Of PA’s Last Coal-Fired Power Plants, To Shut Down

-- Utility Dive: Natural Gas-Fired Power Plant Owner Nautilus Power Seeks FERC Protection From PJM Nonperformance Penalties During Winter Storm Elliot

Related Articles:

-- Senate Hearing On Electric Grid Reliability: Natural Gas Continues To Have Reliability Problems; Renewables Aren’t Coming Online Fast Enough; Energy Office To Be Proposed  [PaEN]

-- PJM This Week Sends Penalty Assessments Of Up To $2 Billion To Electric Generators That Failed To Perform During December’s Winter Storm Elliot; Natural Gas Power Plants Had 63% Of Outages    [PaEN]

-- Guest Essay: A Conservative Argument For Clean Energy -- Follow The Market, Fossil Fuels Are No Bargain - By Dave Jenkins,  Conservatives For Responsible Stewardship    [PaEN]

[Posted: April 3, 2023]

4/10/2023