PSEG Power retires two biggest coal-burning plants in New Jersey

 Hudson County coal-fired facility (image via PSEG)

Hudson County coal-fired facility (image via PSEG)

The old power plant in Jersey City had not run the past seven months, but a couple of weeks ago in the middle of a mini-heat wave, the nearly half-century-old facility got called on one more time.

Not without some challenges, though: This time, the 625-megawatt Hudson unit was running on natural gas instead of the coal that routinely delivered electricity to 600,000 customers.

But tomorrow that era — for both coal and natural gas at that facility — ends once and for all, not only for the Hudson unit, but also for the Mercer coal-fired plant. Their owner, PSEG Power, is retiring the two biggest coal plants left in New Jersey.

It is a trend occurring around the nation, as low-priced natural gas crowds out the fuel that once provided the bulk of electricity, as well as most of the pollution — mercury and other airborne toxin and greenhouse-gas emissions that contributed to climate change.

  • WHYY thanks our sponsors — become a WHYY sponsor

Hudson, which began commercial operation in 1968, used to be a mainstay of PSEG’s diverse fleet of coal, natural-gas, and nuclear plants. As recently as 2006, the plant ran much of the time, a so-called baseload facility in operation 24 hours a day, producing 3 million megawatt hours of electricity. 

Shrinking startups

Ten years later, the unit had just 11 startups during the entire year, and the longest it ran was just six days, according to Roger Clouse, the plant manager at Hudson who worked at the facility for the past 17 years. Last year, it generated just 1,867-megawatt hours, mostly on natural gas.

That is a far cry from the days when the unit was burning 240 tons of coal each hour. Around the country, coal use declined by 18 percent last year, according to the Energy Information Administration.

The 632-unit in Hamilton in Mercer County, which opened in 1960, is also being retired by PSEG, leaving it with just three remaining coal units in its fleet — two in Pennsylvania and one in Connecticut, and that facility is scheduled to shut down in 2021.

“We are not investing in new coal,’’ said Ralph Izzo, president, chairman, and chief executive officer of Public Service Enterprise Group, the owner of PSEG Power. In the past, Izzo had touted coal as helping provide the company with fuel diversity in a volatile energy marketplace.

Good news for ‘greens’

The decision to shutter the plants, is welcome news to environmentalists who have long sought their retirement. “It’s a milestone in energy in New Jersey,’’ said Jeff Tittel, director of the New Jersey Sierra Club.

For the company, the decision is especially difficult because it spent more than $1 billion investing in new pollution-control equipment to meet tough new environmental mandates to control harmful emissions from those plants.

“They are very clean plants, and not because they don’t run,’’ said Izzo, who regrets making the huge investment.  “We were making a bet on Clean Air Act improvements coming through. We got that right. We were making a bet on natural-gas prices. We got that wrong.’’

“To rely on coal for fuel diversity has become uneconomic for two reasons,’’ he said in an interview. The first is low natural prices and the other is changes in the system for determining capacity payments for power plants initiated by the regional grid operator, PJM Interconnection.

No capacity payments

Neither the Hudson nor Mercer plants had received capacity payments from the regional grid operator in the past two years, an issue that has not helped their competitiveness. Capacity payments go to power plants to provide reserve electricity needed at times of heavy demand.

As part of an effort to make the power grid more reliable, the PJM imposed big financial penalties on plants that receive capacity payments but are unable to supply the needed power. 

To ensure the two coal units would be able to comply with those performance requirements would have forced the company to invest hundreds of millions of dollars at each facility, Izzo said. “You just could not make the economics work,’’ he said.

Approximately 200 employees working at the two facilities have all been offered other jobs at the company, although some have declined because they do not want to move, officials said.

The company plans to hold on to the two sites for the present. “It is not easy to site power plants and they do have the infrastructure in place,’’ Izzo said.

At the Mercer facility, the company is talking about building a grid-scale solar farm at the site with state officials, according to Izzo.

For the people who work at the two plants, the retirement will be marked by a farewell luncheon tomorrow, filled with regrets. 

Crouse remembers colleagues were optimistic after the company had made the investment in the back-end pollution technology. “Unfortunately, the low natural gas prices over the last five years triggered market conditions that didn’t favor coal,’’ he said.

WHYY is your source for fact-based, in-depth journalism and information. As a nonprofit organization, we rely on financial support from readers like you. Please give today.

Want a digest of WHYY’s programs, events & stories? Sign up for our weekly newsletter.

Together we can reach 100% of WHYY’s fiscal year goal