Brittany Patterson Published

Pleasants Power Station Gets Temporary Reprieve


A major coal-fired power plant in Willow, Island West Virginia will not close in January 2019 as previous planned. Pleasants Power Station will remain open through May 2022 under a settlement agreement approved by a bankruptcy court last month.

A spokesperson for electric utility FirstEnergy Corp. — whose subsidiary Allegheny Energy Supply owns and operates the plant — said the plant’s ownership will change. The deal will allow Pleasants to continue operating past January 2019 when it was previously slated to close.

“Keeping Pleasants in operation through May 2022 allows the plant to fulfill current capacity obligations and provides additional time for evaluation of the long-term plan for the station prior to deactivation,” Jennifer Young, a spokesperson for FirstEnergy Corp., said in an email.

Allegheny Energy Supply will transfer the plant to bankrupt subsidiary, FirstEnergy Solutions. The deal is part of a larger settlement agreement approved by a bankruptcy court last month.

Under the agreement, FirstEnergy Corp. will make a settlement payment of $225 million to FirstEnergy Solutions and issue $628 million in notes for the subsidiary that will mature on Dec. 31, 2022. Collectively, this money will be used to pay down the $2.1 billion owed to its creditors.

Allegheny Energy Supply will continue to operate Pleasants until the transfer is complete. A date has not been set for when that will happen. Under the agreement, FirstEnergy Corp. will continue to own the plant’s coal ash impoundment, McElroy’s Run, and any related liabilities.

In 2016 FirstEnergy Corp. put Pleasants, which employs about 190 people, up for sale. The company announced in February it would close the 1,300 megawatt power plant unless it could find a buyer. An attempt to sell the power plant to other FirstEnergy subsidiaries, Potomac Edison and Monongahela Power, was shot down by federal regulators earlier this year.

Federal Help?

In a statement, Gov. Jim Justice praised the move and specifically thanked President Trump, Department of Energy Secretary Rick Perry and others for their help “to make sure this plant stays open.”

However, it’s unclear what role the federal government played. A plan to bail out coal and nuclear plants by forcing grid operators to buy power from those struggling plants for two years has stalled.

The plan floated a series of possible federal interventions that relied on the argument that the power generated by coal and nuclear plants is essential for the country’s national security.

One statute outlined in the plan is the 1950 Defense Production Act. The law addresses options for keeping essential supply chain facilities open during wartime or similar emergencies.

The Department of Energy could also use emergency powers under the Federal Power Act. Known as section 202(c), the provision would allow the agency to intervene if the electricity grid faces an emergency. In the past, it has been used during times of war and during natural disasters.

FirstEnergy Solutions lobbied the agency to immediately intervene to stop a series of plant closures. Days later, it declared bankruptcy.

Recent reporting by Politico indicates the bailout plan, as written, has been shelved because it faces opposition from inside the White House.

A request to both the Department of Energy and governor’s office for more information went unanswered.

Even if the federal government revives the plan, many energy analysts say subsidies will only go so far to help keep struggling coal plants going because they do not change the underling market forces: cheap natural gas and stagnant energy demand growth have made coal a more expensive source of electcity.

In June, federal regulators did order regional grid operator PJM Interconnection to redesign how it buys electricity, which could benefit Pleasants down the road. Many of the proposals being considered eliminate the effects of state-subsidized nuclear and renewable resources, which would place electricty generated by coal plants, including Pleasants, on a more even footing.

Officials are not expected to finalize the redesign until 2020.