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FirstEnergy closing two W. Pa. coal-fired plants

| Tuesday, July 9, 2013, 10:36 a.m.
Tribune-Review
Control Room Foreman Ron Gallagher works the smokestack scrubber control panels at the Hatfield's Ferry power plant in this file photo from 2009.

FirstEnergy Corp. announced its third round of coal-fired power plant closings in 18 months on Tuesday, a move that will cost most of the 380 employees at the two affected locations in the Pittsburgh area their jobs and underscores the changing landscape in electricity industry.

The decision to close the Mitchell power station in Union and the Hatfield's Ferry power station in Masontown was announced as FirstEnergy grapples with looming deadlines to upgrade the plants to meet new federal mercury and toxic air pollution standards.

Power generators have had years to bring their coal-fired plants into compliance with the tougher rules, but FirstEnergy Corp., Western Pennsylvania's largest supplier, said that it was too costly to make changes at the two plants. They will close by Oct. 9, the company said.

The Akron-based company is in the process of shutting down 10 coal-fired plants in addition to the two announced Tuesday. The closures amount to more than half of all the company's coal-fired plants.

Electricity prices are so low that the plants won't be able to make money if FirstEnergy spends the $275 million needed to meet new federal mercury and toxic air pollution standards, the company said. The Akron-based company plans to bring its other plants up to code and grow its competitive supply business instead, officials said. They have no immediate plans to join other generating companies competing to build gas-fueled power plants.

“We are evaluating that all the time … but we haven't seen that perfect site or that perfect situation to invest what would be half a billion dollars to build that,” George J. Farah, FirstEnergy's vice president of fossil engineering and construction, said during a stop at the Tribune-Review. “We've seen flat demand, and we'd like to see some growth.”

The nation's electric power industry is in turmoil as low gas prices and growing environmental concerns push a switch away from coal. More plant closings and billions in new investments are sure to follow, especially in Pennsylvania, the country's second-biggest electric power generator and its biggest electricity exporter, experts said.

For local workers, it's a very emotional time, said Bob Whalen, president of the Utility Workers Union System Local 102. It has 182 people who work at the plant and a maintenance unit in Rostraver who had no inkling of the closings, he said. FirstEnergy spent nearly $1 billion on environmental controls at Hatfield's Ferry, which had given workers a sense of security, he said.

“You're talking about a large majority of folks who are in their very late 40s to mid-50s who have dedicated themselves … to this company,” Whalen said. “It's going to be a tremendous devastation to them.”

Coal boosters, including Republican Sen. Pat Toomey, focused on the job loss to reiterate their claims of a “war on coal” from Democrats.

Masontown Borough Mayor Toni Petrus learned about the planned closing of Hatfield's Ferry Power Station on Tuesday morning. She said many Fayette County residents work at the plant, a landmark situated just across the Monongahela River in Greene County.

“I don't know how much more Masontown can lose,” Petrus said. “I don't even know how to put it into words what a blow it is.”

The shift is part of long-term trend in which the market factors of depressed electricity demand and growing local shale gas production have pushed change just as much as environmental regulations, experts said. Coal-fired power plants are also some of the world's biggest polluters, contributing to local health and global climate problems.

FirstEnergy has had plenty of time to adjust, and this is likely the culmination of a lot of strategic planning, said Gregory F. Reed, director of the University of Pittsburgh's Power & Energy Initiative. It has a utility business and distribution customers that many other power companies don't have, so it may make business sense to let its competitors fight to build gas plants, Reed said.

“They've been very successful in the marketplace, and I think they've just looked at this very strategically to strengthen their consumer base,” he said.

Timothy Puko is a staff writer for Trib Total Media. He can be reached at 412-320-7991 or tpuko@tribweb.com. Trib Total Media staff writer Mary Pickels contributed to this report.

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