AES Corp. has shut down its Beaver Valley coal plant in Potter two years ahead of schedule, having failed to secure a buyer for its electricity.
The Virginia-based company flirted with the idea of converting the 125-megawatt plant to run on natural gas, but could find no takers for its energy.
The small coal facility had been feeding neighboring industrial buildings since the mid-1980s, providing power to West Penn Power and steam to Nova Chemicals and BASF. When it lost its last electric customer in 2013, AES Beaver Valley told the regional grid operator, PJM Interconnection Inc., that it would wind down in the summer of 2017.
But the company accelerated the process, taking a financial hit in the short term.
In 2013, West Penn Power paid AES $60 million to end its long-term power purchase agreement three years ahead of its expiration. Without that revenue stream, AES was forced to write down $46 million associated with the value of its Beaver Valley plant.
In May, AES worked out a deal with Nova Chemicals to get out of its lease.
“It really came as a surprise to us when we saw the barriers go across the driveway,” said Rebecca Matsco, who chairs the Potter County board of supervisors.
Ms. Matsco knew the company was considering a switch to gas, but said chatter about the plant dropped off abruptly. “And then it just seemed to stop. We did not hear anything.”
Last spring, AES asked the Pennsylvania Department of Environmental Protection for permission to install and operate burner inserts in three boilers that would allow AES Beaver Valley to burn gas in addition to, or instead of, coal. The state approved the permit earlier this year.
AES generation plants serve customers in seven states including Pennsylvania and West Virginia. The company has long-term contracts for most of its facilities, said spokeswoman Amy Ackerman. Without one, switching to natural gas or running the plant at all “wouldn’t be financially viable,” she said.
The plant was built in 1942 by another company and converted into a cogeneration facility — one that produced both steam and electricity — when AES bought it in 1985. It has three coal boilers and two turbine generators. The equipment, valued at $1.2 million, was transferred to Nova this summer.
“Nova Chemicals is evaluating plans to demolish the assets over the next several years,” said Pace Markowitz, a spokesman for the Canadian chemical company which has executive offices in Moon.
Anya Litvak: email@example.com or 412-263-1455.
This article was written by Anya Litvak from Pittsburgh Post-Gazette and was legally licensed through the NewsCred publisher network.