EPA rules lead to closures at Bay Shore

FirstEnergy Corp. plans to shut down three of Bay Shore's four generators in Oregon by Sept. 1. THE BLADE Enlarge | Buy This Photo

FirstEnergy Corp. plans to retire three of the four generators at its Bay Shore plant in Oregon because of stricter U.S. Environmental Protection Agency standards put in place late last year, the utility announced Thursday.

The three coal-fired units that will be permanently taken offline have been used primarily during summer peak generation times in recent years. A fourth generator at Bay Shore that burns pet coke supplied by the nearby BP-Husky refinery will continue to produce electricity. Pet coke, or petroleum coke, is a product that is left over after crude oil is refined and is similar to coal.

Bay Shore's closures would take place by Sept. 1.

FirstEnergy officials said the plant employs 153 people. The closure would eliminate 80 of those jobs.

Charles Lasky, vice president of fossil fleet operations for FirstEnergy, said the company will try to preserve as many jobs as possible.

"We'll look for all available positions and try to align qualifications with those positions to the best of our ability," he said.

FirstEnergy is offering employees 55 and older a retirement package. Officials said 57 of the 80 affected employees at Bay Shore are eligible.

The potential impact to consumers' wallets remains to be seen. Ray Dotter, a spokesman for PJM Interconnection, a group that serves as an independent grid manager for the eastern United States, said when utilities close plants, there can be short-term cost increases if they need to upgrade transmission systems to get electricity from elsewhere. But he also pointed out that companies typically close their most costly operations, meaning the remaining ones are more cost-efficient.

As for businesses, proximity to a generation station isn't much of a concern nowadays.

"Generally as long as you have a strong transmission system, it doesn't matter where you are," Mr. Dotter said.

Bay Shore, which is metropolitan Toledo's last commercial electric generation facility, was one of six plants targeted for closure Thursday.

The utility plans to retire plants in three other Ohio cities -- Ashtabula, Cleveland, and Eastlake -- as well as plants in Adrian, Pa., and Williamsport, Md.

Officials said a combination of factors led to the decision to retire the Bay Shore plant, including a lower local industrial base and historically high numbers of fish killed by the plant. But the main reason cited was the new EPA rules.

Set in December, those standards soon will limit emissions of mercury, arsenic, and other toxic pollutants. FirstEnergy officials said the regulations force companies to look at their operations on a plant-by-plant basis.

"We have to look at the world we're living in today," FirstEnergy spokesman Todd Schneider said. "The rules are a game-changer and we had to make adjustments."

Mr. Lasky did not have a dollar figure available on what it would have cost to put the coal-fired generators into compliance, but said it was "more than we could justify."

Enlarge

Like all the plants pegged for closure, Bay Shore is old. The oldest operating unit at Bay Shore was put online in 1958. The company said the average generator being retired is 55 years old.

The retirements are subject to review by PJM.

PJM's Mr. Dotter said an analysis would be done on each of the plants identified for closure to make sure there is enough generation capacity, and capacity in the right locations, to keep up with the electricity demand for the area they supply.

"If nothing's identified, they can go ahead and shut down when they want to," Mr. Dotter said.

If a concern is identified, the utility will be asked to keep the plant in operation until a fix is put in place.

In all, the total capacity being taken offline is 2,689 megawatts.

Officials said most of the plants, Bay Shore included, were being used as peak or intermediate facilities, and together they generated on average 10 percent of the electricity produced by FirstEnergy during the last three years.

Mr. Dotter said PJM produced a report last year that examined the effect of the proposed EPA rules.

The report found several plants were likely to close under the new standards, but across the region there would be adequate production capacity. However, it also found there could be local reliability concerns.

The report did not give a plant-by-plant analysis, and Mr. Dotter couldn't comment specifically about the Oregon plant until the analysis on the plant was complete.

With all four generators spinning, Bay Shore had a capacity of about 620 megawatts. The pet coke burning unit alone generates 136 megawatts, enough to power approximately 136,000 homes.

U.S. Sen. Rob Portman (R., Ohio) said Thursday that if the EPA had to follow the rules he's proposed, FirstEnergy would not have been forced to shut down coal-fired plants in Ohio and lay off workers.

Mr. Portman has previously introduced legislation that would require all environmental regulations to be subject to a cost-benefit analysis, and then would require the agency to enforce the regulation that would cause the least burden on the economy.

"If we had those kinds of regulations in place, I don't believe you could have a regulation like the [one] that came out of the EPA because it would have to have gone through a rigorous cost-benefit analysis and to have chosen the least burdensome alternative on the economy," Mr. Portman said.

The Bay Shore plant has been a target of fishermen and environmentalists for years because of the large number of fish it kills.

Regulators gave FirstEnergy permission last summer to install a row of louvered panels designed to keep fish out of the intake stream. That project remains on track, officials said Thursday.

Retiring the three generators would reduce the amount of water intake into the plant and by extension should cut down on the number of fish killed.

Staff writer Tom Troy contributed to this report.

Contact Tyrel Linkhorn at: tlinkhorn@theblade.com or 419-724-6134.