FirstEnergy Corp. may not be able to shut down Hatfield’s Ferry and Mitchell power plants in southwestern Pennsylvania by Oct. 9, as the company has previously announced.
The grid operator that schedules electricity for 13 states including Pennsylvania believes that reliability could be compromised if the two coal-fired power stations retire within the next three months.
According to Valley Forge-based PJM Interconnection, the upgrades that would be necessary to the transmission infrastructure to compensate for the lost generation will not be ready by the proposed closing date. Therefore, it’s asking the company to continue operating the plants until reliability issues are addressed.
It’s not yet clear how long that will take.
Ray Dotter, a spokesman for PJM, said the next step is for the grid operator and the company to “identify solutions to the concerns and determine the amount of time required to put the solution into place.”
The Hatsfield’s Ferry plant in Masontown, Greene County, and the Mitchell plant in Courtney, Washington County, together have the capacity to generate about 2,000 megawatts of power.
FirstEnergy spokeswoman Jennifer Young said the company is reviewing PJM’s assessment, but is still going forward with plans to close the plants by Oct. 9.
“We will evaluate the information they have … and continue to have conversations with them,” Ms. Young said.
PJM doesn’t have the authority to force FirstEnergy to keep operating the plants, but no generator has ever denied a request by the grid operator to stay open for reliability reasons.
If FirstEnergy agrees to keep the plants open, it will be compensated for the cost to run them through a transmission charge to PJM customers. The rate will be set by the Federal Energy Regulatory Commission.
Akron, Ohio-based FirstEnergy announced it will shutter the two Pennsylvania plants because demand for electricity is down and plant retrofits would cost the company $275 million to comply with impending environmental regulations.
FirstEnergy cited similar reasons last year when it announced the retirements of nine coal plants, including the Armstrong plant in southwestern Pennsylvania.
Of those nine, however, PJM asked FirstEnergy to continue to operate three plants in Ohio until 2015 to avoid reliability issues. The company agreed to that request.
By MELODIE WARNER
Hess Corp. HES +3.18% agreed to sell its energy-marketing business for about $1.03 billion to Direct Energy, Centrica CNA.LN +2.13% PLC’s North American unit, as part of its plan to exit the downstream business.
Hess has been shedding assets to fund drilling-and-exploration efforts as it struggles with lackluster profits and a shareholder revolt. The New York oil-and-gas producer agreed in April to sell its stake in a Russian subsidiary to OAO Lukoil LUKOY -1.17% for $1.8 billion.
The energy marketing business supplies natural gas and electricity to 23,000 customers in the eastern half of the U.S.
Hess said the energy marketing sale raises its total divestitures so far this year to $4.5 billion.
Hess has used proceeds from its prior asset sales to repay $2.4 billion of debt. The company said it will use the funds from the latest sale to buy back stock under its existing $4 billion share repurchase authorization.
Hess has been battling criticism from dissident investor Elliott Management Corp., which has aimed to elect five board members. The hedge fund, which controls 4.4% of Hess’s shares, also wants to split Hess into two companies in a bid to boost the stock’s performance. Hess had offered to appoint two directors nominated by Elliott if the shareholder withdrew its five nominees to the board, but Elliott rejected the offer in May.
Hess reported in April its first-quarter earnings more than doubled on gains from asset sales, while revenue jumped 39% despite lower production.
The number of demand response (DR) sites worldwide will reach 21.9 million by 2020, growing from 10.3 million in 2013, finds a new report from Navigant Research.
This year, the report says total load curtailment in the world from DR programs is estimated to be 57,764 MW. By 2020, global load curtailment is expected to reach 140,472 MW at a compound annual growth rate (CAGR) of 13.5%.
Although DR is a relatively mature market in the U.S., the report says DR programs are just getting under way in most other regions, including Europe, Asia Pacific, the Middle East and Africa. In the years ahead, countries in these regions promise to develop robust DR markets with solid growth prospects.
“While the majority of DR sites today are residences located in North America, the technology will expand rapidly to include homes, commercial buildings and industrial facilities in many countries,” says Marianne Hedin, senior research analyst with Navigant Research. “The adoption of automated demand response (ADR) looks especially promising, particularly in Asia Pacific, which will most likely leapfrog less advanced technologies, moving directly to ADR as the market accelerates.”
Both energy demand and reliance on intermittent renewable sources like wind and solar power are growing in many countries. The report says these developments make it necessary for utilities to balance the grid through DR on a continuous basis (frequently second by second) to address constant power fluctuations on the grid. In addition, new technologies (e.g., smart meters) and open standards like OpenADR and Smart Energy Profile 2.0 are opening up new DR opportunities.
For more information about Navigant Research’s report is available here.
Is your company participating in Demand Response programs? Contact Richards Energy Group for more details.