By John Stang
FirstEnergy Solutions contended Monday that the shutdown of four nuclear power reactors in Ohio and Pennsylvania will hurt the long-term energy picture for the area covered by transmission clearinghouse PJM Interconnection.
The utility was responding to PJM’s report that day that “resource retirements” would not undermine the reliability of its power grid. If the Department of Energy agrees, that could spell trouble for FirstEnergy’s request for emergency assistance to keep its plants operating.
In late March, FirstEnergy announced it would by October 2021 halt power production at the reactors at three nuclear plants: the Davis-Besse Nuclear Power Station in Oak Harbor, Ohio; the Perry Nuclear Power Plant in Perry, Ohio; and the two reactors of the Beaver Valley Power Station in Shippingport, Pa. The Akron, Ohio, company, a subsidiary of FirstEnergy Corp., says its coal-fired and nuclear power plants have not been able to economically compete with cheaper power produced by natural gas.
Within days of its announcement, FirstEnergy Solutions had declared Chapter 11 bankruptcy and asked Energy Secretary Rick Perry to use his authority under the Federal Power Act to order PJM Interconnection to sign contracts that guarantee the company’s nuclear and coal plants can fully recover their costs along with a return on their investments.
So far, the Energy Department has been closemouthed regarding its consideration of FirstEnergy Solutions’ request.
PJM opposes the request because it believes it can obtain enough power from other sources.
“The planned deactivations of the units can proceed as scheduled without compromising reliability in the PJM transmission grid, according to a study by PJM and affected transmission owners,” PJM spokesman Jeffrey Shields said by email.
The spokesman was referring to PJM’s “Valuing Fuel Security” report, released Monday, which addresses the vulnerability of fuel supplies and deliveries to power generators — and the increased risk of relying on a single fuel-delivery system.
The report notes that 86 percent of PJM’s power comes from natural gas, which raises questions about whether nuclear and coal-fired plants would still be needed to provide backup electricity. In the report, PJM called for studies on the situation to be conducted through the end of this year and possibly into early 2019.
FirstEnergy says it will reach the point-of no-return deadline on closing the four reactors in mid-2019
In a press release that followed the PJM report by hours, FirstEnergy Solutions acknowledged the transmission provider does not believe the nuclear plant closures would hurt its system. However, the report does add a new wrinkle, FirstEnergy said: PJM would have to conduct various “remedial measures” to prevent transformers and transmission lines from overloading, among other potential impacts to its system after the nuclear plants close.
“The results of the PJM reliability study highlight that their review ignores the value that these units offer the grid in terms of fuel diversity and zero-carbon emissions generation. The 4,048 megawatts of capacity that these plants provide amounts to 14 percent of Ohio’s overall generation capacity and 7 percent of Pennsylvania’s overall generation capacity. That gap will have to be filled overwhelmingly by carbon-fueled generation,” Don Moul, president of FirstEnergy Solutions Generation Cos., said in the release.
PJM’s transmission systems cover all or parts of 13 states and Washington, D.C. Its coverage area stretches from Michigan in the north to Tennessee in the south and from Indiana and Michigan in the west to New Jersey in the east.
On Tuesday, PJM Interconnection President and CEO Andrew Ott appeared to slightly concede the company might re-examine reactors to spread out its sources for electricity. “We know the PJM grid is reliable, fuel secure and diverse. But we also face a legitimate question – are we going to find ourselves in a situation where we are overly dependent on one fuel delivery system?” he stated in a newsletter to PJM employees.
Ott’s comments recognize the potential loss of power production diversity should FirstEnergy’s Ohio and Pennsylvania reactors close, according to Matt Wald, a spokesman for the Nuclear Energy Institute.
Wald said FirstEnergy’s request to the DOE under section 202(c) of the Federal Power Act has opened up new state and federal discussion on the importance of having a mix of different power sources for PJM.
FirstEnergy Corp. has taken steps to financially shield itself from creditors of FirstEnergy Solutions. The company said last week it has reached an “agreement in principle” with the majority of FirstEnergy Solutions’ creditors to settle all possible claims.
So far, parent FirstEnergy and FirstEnergy Solutions have been mum about whether FES and its creditors are considering selling the four reactors to another company for the new party to tackle the actual decommissioning. Entergy is trying to take that route in a yet-to-be approved sale of its Vermont Yankee reactor to NorthStar Group Services.
All parties have a deadline of June 5 to sign the tentative agreement. FirstEnergy Corp. spokeswoman Tricia Ingraham said the corporation has not released any information on who has signed the agreement in principle so far.
