As Coal-Fired Power Plants Switch Off, New Businesses Sought

By Laura Legere | Pittsburgh Post-Gazette

A fire was reported at the Bruce Mansfield Power Plant, in Shippingport, Pa., in Beaver County. According to the Sierra Club, 268 coal-fired power plants across the nation have retired or announced specific plans to retire since 2010 — or more than half of the plants operating at the end of the last decade. (Darrell Sapp/Pittsburgh Post-Gazette via AP)

PITTSBURGH (AP) — If the closed Mitchell Power Station on the west bank of the Monongahela River ever turns into anything industrious again, a sweeping 78-page document commissioned by the state economic development agency might have something to do with it.

Like hundreds of coal-fired power plants across the country, the former FirstEnergy Corp. facility 18 miles south of Pittsburgh shut down in the last decade. It couldn’t compete with cheaper energy sources, lower demand and stricter air pollution rules.

After 65 years in operation, the Washington County facility last made electricity in 2013.

These days, Bill Staley of Finleyville, who spent his career at the plant, sometimes avoids driving by it. Mitchell, he said, “used to be a shining beacon,” lit up like a small city, and now its emptiness looms.

“It is just this huge, hulking plant that is rusting away,” he said. “It would be nice if they could do something with it.”

Several environmental, economic and policy factors conspire to keep Mitchell in a limbo status that real estate developers call “cold and dark” — secure, vacant and slowly decaying in the communities that benefited and made sacrifices to host it.

The Pennsylvania Department of Community and Economic Development hopes the redevelopment document might break the spell.

The playbook — the first in a series planned for closed Pennsylvania coal plants — is written to inspire developers’ interest in reusing the shuttered Mitchell site and the surrounding 800 acres of woods and fields mounded with mining waste rock and a coal ash landfill.

“We want to engage with the development community in a meaningful way and get these sites back into reuse,” said Denise Brinley, the agency’s senior energy adviser.

“We have a lot of work to do. There’s a lot of them.”

According to the Sierra Club, 268 coal-fired power plants across the nation have retired or announced specific plans to retire since 2010 — or more than half of the plants operating at the end of the last decade.

In Pennsylvania, 11 power plants have shut down coal-fired generating units since 2010 and another three have converted to run on natural gas.

More closures are certain and other shifts likely: The 105-megawatt Colver waste coal plant in Cambria County has set a September 2020 date for retirement. Talen Energy has committed to switch from burning coal to gas at its 1,400-megawatt Brunner Island power plant in York County by 2028.

And FirstEnergy, whose competitive power generation subsidiary filed for bankruptcy last month, has said it will close the massive 2,500-megawatt Bruce Mansfield coal-fired power station in Beaver County and its other plants in Pennsylvania if it can’t find a buyer.

“Cold and Dark”

Closed coal plants generally have features that industrial site-selectors yearn for: connections to rivers, highways, railroads, pipelines and the power grid.

But the specter of environmental liabilities haunts every potential power plant sale. The costs to remediate possible leaks, asbestos and waste lagoons generally aren’t known until the work has begun.

“Most power plant operators would rather proceed with an as-is, where-is transaction,” Brinley said. They are happy to sell the property if a buyer takes on all environmental liability, but they won’t generally allow anyone on site to do an in-depth environmental investigation in advance.

Lenders, on the other hand, typically demand some estimation of environmental liabilities before agreeing to finance a purchase. And developers are reluctant to take on a site’s risk if they don’t know what it will cost or how long it will take to deal with.

Because of the information vacuum, “We have not had many successful transactions,” Brinley said.

Much of the country is dealing with this conundrum.

The Delta Institute, a Chicago-based nonprofit, reviewed 25 redevelopment projects at closed coal plants in U.S. urban areas in 2014 and found it takes an average of 27 years after a plant’s closure for site redevelopment to be completed.

An October 2017 Resources for the Future report said that out of an incomplete list of 102 retired coal-fired generating units, 55 had been demolished as of last July and 37 were “cold and dark.”

Ed Malley, a power plant redevelopment specialist with the Massachusetts-based TRC Companies, said there is no federal law to keep closed power plants from sitting cold and dark indefinitely. In deregulated power markets, like Pennsylvania, where companies can’t pass the costs of decommissioning on to electricity ratepayers, plant owners typically choose to do little with the sites rather than invest money they can’t recover to dismantle them, he said.

After FirstEnergy’s Mitchell and Hatfield’s Ferry power plants were deactivated on the same day in 2013, state Rep. Pam Snyder, a Greene County Democrat, introduced a bill that would have created a Pennsylvania commission to oversee coal plant closures and require plant owners to remediate their facilities and surrounding property.

The bill never moved out of committee.

“The whole thing turns on economics,” said Malley. “If there is a valuable piece of property that has a power plant on it, chances are that someone will want it. But if the site doesn’t have a lot of value, it is very difficult.”

The difference, he said, mostly has to do with location.

Exelon Corp. sold a closed power plant in South Boston for $24 million in 2016 to a developer who plans to turn it into a mixed residential and commercial district. The same year, NRG Energy sold a closed power plant on the San Francisco waterfront for $85 million.

But in southeast Indiana, a subsidiary of the utility company American Electric Power paid a decommissioning specialist company $92 million in 2016 to take a closed coal plant, and its environmental liabilities, off its hands.

A Great Future in Plastics

In 2016, Pennsylvania received $960,000 in federal funding to develop documents that demystify the state’s closed coal plants: name their assets, disclose likely remediation costs, explain the economic context of the surrounding region and investigate the most promising reuse scenarios.

After the Mitchell playbook, DCED is preparing to address the Cromby station in Chester County and the Sunbury station in Snyder County next.

The Mitchell playbook, produced by the Robinson-based firm Civil & Environmental Consultants, identifies chemical and plastics manufacturing as the best opportunities to draw businesses to the site, which the firm said is too remote to attract residential and commercial developers.

The document lays out three potential reuse scenarios.

The first envisions the whole, 856-acre site hosting one or two large manufacturers, ideally those that are natural-gas intensive or that could use plastics feedstock that will be produced at the Shell Chemical ethane cracker plant in Beaver County.

The second suggests using just the 799 acres surrounding the former power plant to create an industrial park for light manufacturing, logistics and warehouses, with retail and restaurants in the center for park employees. The power plant would be turned into green space along the river.

The third would redevelop just the 57-acre power plant site into a riverfront manufacturing facility that could use plastics feedstock or the region’s abundant natural gas. The total project cost would be $32 million and, unlike the other two options, would be “financially viable” without any public subsidy.

Ultimately, the report recommends a two-phase strategy: redevelop the smaller power plant site first as a way to spur interest in developing the rest of the property for large industrial users or as an industrial park.

An ambitious timeline calls for having the riverside parcel cleared, sold, rebuilt and manufacturing in 30 months.

Open to Opportunities

FirstEnergy’s director of economic development Patrick Kelly said it was clear even before the report was started that southwestern Pennsylvania needed more sites for businesses that want to make things from the natural gas liquids flowing from the region’s Marcellus and Utica shale wells.

The Mitchell site is particularly promising because the cross-state Mariner East natural gas liquids pipelines run under the northern end of the property.

Before the idea for the playbooks was hatched, FirstEnergy did not have specific plans for Mitchell, although spokeswoman Stephanie Walton said the company is “always open to opportunities and we certainly make that known.”

The company cooperated in making the playbook by offering access and information that only the plant operator would know.

“We were just happy to do what we could for the area around Mitchell,” Kelly said. “We recognize that when we do close a plant it has an impact.”

Ideally, the end result “would be somebody that is going to come in and create jobs and wealth for the community and be a great community partner,” he said. “And maybe use some of our electricity.”

Bill Staley would welcome that outcome.

Four years ago, he was the last one out of the Mitchell plant and — as the longest-serving employee of the three left on duty that day — he was the one who locked the gate.

The plant is linked to his life like cobwebs: His great grandfather farmed the property that now holds the plant’s combustion waste landfill. He grew up in New Eagle, close enough for fly ash from Mitchell to dust the porch of his childhood home. He got a job as a chemical technician at the plant out of college in 1982 and settled in Finleyville, six miles from the site.

He retired early, like the plant he worked at for just shy of 32 years. He missed the anniversary by two days.

“It’s sad every time I drive by the place,” Staley, 61, said. “Honestly, sometimes I avoid it. I try to go around just so I won’t have to look at it.”

 

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