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FirstEnergy Corp. recently announced that it will no longer seek to achieve a 30% short-term reduction in certain greenhouse gas (GHG) air emissions by 2030, an interim target that the company initially proposed to help achieve its long-term goal of carbon neutrality by 2050. In order to meet the interim target, FirstEnergy would need to meaningfully reduce the operation of two coal-fired electrical generation facilities in West Virginia, its Fort Martin and Harrison plants, as they are the main sources of GHG air emissions in the company’s generation fleet.

FirstEnergy identified three challenges that prompted its decision to rescind the GHG reduction interim target:

  • West Virginia energy policy: Intentional reduction of coal generation output for environmental reasons would be inconsistent with West Virginia’s energy policy.
  • Resource adequacy concerns: Significant retirements of base load fossil fuel-powered plants scheduled through 2030 have created uncertainty about what resources will replace that electrical generation capacity.
  • Changing market conditions: Retirements of legacy generation facilities and changes in natural gas prices have made operating the Fort Martin and Harrison plants more profitable than historically projected.

To meet its long-term goal of carbon neutrality by 2050, FirstEnergy plans to retire the Fort Martin and Harrison facilities in 2035 and 2040, respectively. In the interim, FirstEnergy will continue to monitor and evaluate emerging solutions to reduce GHG air emissions from the West Virginia plants and focus on reducing GHG emissions from its transmission and distribution businesses.

FirstEnergy is not the only coal-fired electric utility to seek a delay in closure. Coal plants across the U.S., including facilities in New Mexico, Wisconsin, and Indiana, have signaled delays of planned legacy generation retirements.

In addition, PJM Interconnection, the regional transmission organization serving West Virginia and 12 other states, shares FirstEnergy’s resource adequacy concerns. In its report titled “Energy Transition in PJM: Resource Retirements, Replacements & Risks,” PJM identified trends that present increased reliability risks, including growth in electricity demand from electrification and the proliferation of high-demand data centers, the pace of legacy electricity generation facility retirements, and production capacity from intermittent and limited-duration electricity resources.

Pending federal environmental regulations limiting GHG air emissions, including the U.S. Environmental Protection Agency’s proposed emission guidelines for certain existing coal-fired plants under the Clean Air Act, could affect plant retirement schedules by requiring plants that operate for longer periods of time to install emissions controls, co-fire with natural gas, or use carbon capture and sequestration.

At Frost Brown Todd, we believe that knowledgeable and effective counsel is critical for utilities to navigate this evolving regulatory landscape. For more information about how these developments could impact your business, please contact the authors or any member of Frost Brown Todd’s Utilities team or Environmental practice group.