Coal Age

NOV 2018

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Page 11 of 51

10 November 2018 news continued most of the attention in recent years, LG&E/ KU said their loads actually have been af- fected more during the period by declines in western Kentucky, home of some of the state's largest underground coal mines. KU's largest coal producers are in the western Kentucky counties of Union, Hopkins, Muhlenberg and Webster. That is where Alliance Resource Partners and Murray Energy Corp. own large under- ground coal mines. While the outlook for coal "remains weak," the utilities said, they "do not expect sales to the mining sector to continue to decline at the same rate mov- ing forward for several reasons," including that the majority of announced coal-fired generating unit retirements already have occurred in the region, and coal exports to foreign markets "remain a viable option for producers." Indeed, U.S. thermal coal exports in- creased from 3.5 million short tons (st) to 12.3 million st between the third quarter of 2016 and the first quarter of 2018, LG&E/ KU noted. Australia's Paringa Resources is pre- paring to start production at a new deep mine in western Kentucky's McLean Coun- ty that is contracted to supply 4.75 million tons of steam coal to LG&E/KU over the next five years, starting in early 2019. Under the new IRP, LG&E/KU expect to retire Brown units 1 and 2, totaling about 272 MW, in early 2019. That com- prises the bulk of the planned coal shut- downs, although IRPs are a snapshot in time and can undergo changes. Altogether, LG&E/KU currently own and operate in excess of 5,000 MW of coal generation out of their approximately 8,000-MW generation portfolio. The PSC plans an IRP review pro- cess that is expected to continue at least through February 2020. Northern Indiana Public Service Plans Coal Retirements by 2028 Northern Indiana Public Service Co. af- firmed plans in early November to tran- sition its largely coal-burning generating fleet to renewable energy sources, such as solar and wind, over the next decade to reduce carbon dioxide emissions by 90%. About a year ago, the NiSource Inc. sub- sidiary disclosed it might move up planned retirement dates for its 1,780-megawatt (MW ) R.M. Schahfer coal plant near Wheatfield, Indiana, and 480-MW Mich- igan City coal plant to 2023 and 2028, re- spectively. Coal industry and other local officials urged the Merrillville-based utility to reconsider, citing actions by the pro-coal Trump administration to ease the regula- tory burden on coal plants that had been imposed by the federal Environmental Pro- tection Agency (EPA) during the eight-year reign of former President Barack Obama. But in a new integrated resource plan filed with the Indiana Utility Regula- tory Commission, Nipsco essentially dou- bled down on plans to stop coal burning within a decade by shuttering both Schah- fer and Michigan City, representing about 2,200 megawatts of baseload generating capacity. The utility's 604-megawatt Bailly coal plant was closed about two years ago. "We have the opportunity to invest in balanced options that will deliver more cost-effective and cleaner energy for our customers," said Nipsco President Violet Sistovaris. "The 'Your Energy, Your Future' initiative envisions a brighter future that de- livers the energy our customers need while reducing emissions and focusing on the long-term strength of our local economy." Sistovaris cited clean technology and market changes that continue to trans- form the U.S. energy industry, opening the door for more competitive options. To replace the coal plants, Nipsco an- ticipates pursuing largely renewable ener- gy resources combined with battery stor- age technology. The timeline for the coal plant retirements is faster than indicated in the utility's last IRP several years ago because the energy market "has produced more competitive and cost-effective op- tions for Nipsco customers," the company added. IRPs are a snapshot in time and often under changes. Nipsco's latest IRP runs through 2033. Nipsco spokesman Nick Meyer said the utility intends to close Schahfer Units 14, 15, 17 and 18 no later than 2023 and Michigan City in 2028. Nipsco considered keeping Schah- fer running past 2023, but determined it would have to spend "several hundred million dollars" on new pollution controls to do so, Meyer said. Until recently, Nipsco expected to retire Michigan City in 2035, "but we pulled that forward." Operation of Nipsco's existing 535- MW Sugar Creek natural gas plant in West Terre Haute, Indiana, and the Norway and Oakdale hydroelectric dams along the Tippecanoe River in Indiana will continue. According to Meyer, Schahfer and Michigan City primarily burn low-sulfur Powder River Basin coal, altogether 6 mil- lion to 7 million short tons per year (stpy) Nipsco also submitted a new rate hike request to the IURC to, in part, support the new IRP. Regulators are expected to seek public comments on the rate application, which would raise the average residential customer's monthly bill by $11, or 12%, over the next several months. "We know that every dollar matters to our customers, so we want to be up-front about shorter-term shifts some of our cus- tomers will see in their bills during this transition" Sistovaris said. "This proposal allows us to provide the level of service our customers expect, addresses changes in the way major industrial customers will acquire electricity and it proposes new assistance programs for income-eligible customers." Nipsco serves about 457,000 electric customers in northern Indiana. Pleasants Power Station Will Stay Open The First Energy Pleasants Power Station in Belmont, West Virginia, will remain open until at least June 1, 2022, according to the company. The plant was originally scheduled to close in January. The plant employs 160 people. The delay will allow the plant to re- main in operation until its transfer from FirstEnergy's Allegheny Energy Supply to FirstEnergy Solutions, a bankrupt subsid- iary, is complete, spokeswoman Jennifer Young said. "In April 2018, FirstEnergy announced that it had reached an agreement in prin- ciple to transfer ownership of Pleasants Power Station to creditors in the bank- ruptcy of [First Energy Solutions] and its subsidiaries, and [FirstEnergy Nuclear Op- erating Company]," Young said. The agreement was approved by the bankruptcy court on September 25 and was intended to release FirstEnergy and related parties from all claims, she added. A transfer date of the plant has not been set. West Virginia Gov. Jim Justice ap- plauded the announcement. "While the plant will remain opera- tional until June 2022, today's announce-

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