June 14, 2021
The operator of the second largest coal-fired power plant in Maryland announced that the plant will retire next year, which is five years earlier than previously announced.
GenOn Holdings plans to shut down two of its 50-year-old coal units at Morgantown Generating Station in Charles County by June 2022. The two coal units together have a capacity of 1,229 megawatts of power. Maryland consumes about 60 million megawatts each year.
In December, the company announced that it would cease coal operations by 2027, so this is a substantially accelerated timetable.
While environmental groups are generally happy with the decision, the new timetable means dozens of the plant’s employees will be out of a job sooner than anticipated — and before meaningful worker retraining programs can be launched.
In a statement issued last week, GenOn Holdings said its decision to retire its coal production in Ohio, Pennsylvania and Maryland “is driven by unfavorable economic conditions, higher costs including those associated with environmental compliance, an inability to compete with other generation types, and evolving market rules that promote subsidized resources.”
After PJM, a regional electric transmission operator on the East coast, conducts a 90-day review of the reliability consequences of deactivating the units, GenOn will begin curtailing its workforce and provide benefits to affected employees, according to a statement.
“The decision to retire a power plant is always a difficult one for employees and the local communities. These are not decisions taken lightly,” GenOn CEO Dave Freysinger said in a statement. “GenOn will provide transition assistance, including advance notice, severance payments and access to health care, in accordance with our contracts and policies to all affected workers.”
The Morgantown plant will continue to generate energy using natural gas and oil, which currently produce 252 megawatts altogether.
This announcement marks the end of coal-burning by GenOn Holdings in Maryland. Last summer, the company abruptly shuttered its coal plants in Dickerson and laid off its employees with only 90 days notice. GenOn Holdings also closed two of its 55-year old coal plants at Chalk Point Generating Station in southern Prince George’s County earlier this month.
The remaining coal-fired power plants in the state are Brandon Shores and H.A. Wagner power plants in Anne Arundel County’s Curtis Bay and Warrior Run power plant in Allegany County.
In October, Talen Energy Corp. announced that its two power plants in Anne Arundel County are slated to retire by 2025.
AES Corporation, a company based in Arlington, Va., has not announced an end date for its coal-burning operations at Warrior Run, but Sen. Christopher R. West (R-Baltimore County) wrote in a letter to the Senate Finance Committee in February stating that he worked out a deal with the company to stop burning coal in 2030.
Environmental advocates heralded GenOn’s earlier date to stop burning coal at Morgantown, but called for a formal transition plan so that affected communities are not subject to the whims of power companies.
“This accelerated time frame underscores yet again the urgency of having a transition plan in place for workers and communities that have depended on the plant’s revenues and that have borne the brunt of harmful pollution for decades,” David Smedick, senior Mid-Atlantic campaign representative for the Sierra Club’s Beyond Coal Campaign said in a statement.
“Companies like GenOn can decide when it is most advantageous for their bottom line to pull the plug on a plant. Policymakers have vanishingly few excuses to establish a timely transition plan off coal and to clean energy that supports our communities, protects residents from further pollution burden, and promotes good union jobs for impacted workers,” he continued.
Legislation stalled in Annapolis
When GenOn Holdings announced in December that it would halt coal operations at its Morgantown power plant by 2027, the company also expressed support for bipartisan legislation called “The Maryland Coal Community Transition Act of 2021,” which would have phased out Maryland’s coal-fired plants over the next decade and establish a council to mitigate economic impacts for displaced employees.
However, the bill faced a strong divide between environmentalists and labor unions and was ultimately withdrawn by Del. Benjamin T. Brooks Sr. (D-Baltimore County), the House sponsor of the bill, in favor of a “summer study” during the legislative interim. But West, the Senate sponsor of the bill, said on Monday said he had not been contacted for a “summer study.”
“Burning coal is far more expensive these days than the alternatives, and it appears that the underlying economics are driving the early closure of the few remaining coal burning plants in Maryland,” West said.
With Morgantown’s early retirement confirmed, conversations with labor that were planned for the summer “would probably be moot at this particular point,” Brooks said Monday. If his bill had passed, there would have been $13.3 million set aside each year, a part of which could have been used to help coal workers at Morgantown transition into other jobs, Brooks said.
“Rather than exiting off a ramp, [impacted workers] will probably be exiting off a cliff,” Brooks said.
“I’m saddened by the fact that these workers are going to be transitioning sooner than they had anticipated, but I’m heartened by the fact that we’re doing things to improve our environment.”
In 2019, the state Department of the Environment found violations of GenOn’s permit at Morgantown, stating that the company “failed to minimize the contamination of surface water runoff from areas adjacent to disposal ponds or landfill.”
The Potomac Riverkeeper called on the company to clean up its coal pollution at Morgantown.
“The Morgantown plant has been discharging selenium, mercury and arsenic to the Potomac River for decades, poisoning fish and people. Closing Morgantown’s coal units will be good for the river and communities nearby, but we need to make sure that any closure plan includes requirements to clean up legacy contamination at Morgantown that could continue to pollute the environment long after it’s closed,” Dean Naujoks, the Potomac Riverkeeper said in a statement.
Over the past decade, economic forces and government regulations incentivizing renewable energy sources have led power companies across the country to retire their coal operations or run them less frequently.
Thirty-two out of the 44 coal-fired power plants on PJM’s electric grid will be unprofitable in 2023, according to a recent Bloomberg article. Coal was the only fuel that declined in PJM’s capacity auction, a nod to its lack of financial competitiveness compared to natural gas and renewable sources of energy, which significantly increased in value, according to Bloomberg.
Some states have passed legislation supporting “just transitions,” such as the Colorado General Assembly’s $15 million stimulus measure to fund the state’s office of just transitions and its plan to assist communities and workers who have coal-related jobs.
Brooks said that there’s a “possibility” that another coal transition bill will be introduced next year, depending on conversations with labor unions. But a transition plan does not only have to come through state legislation, Smedick said, but also from the federal government or the state executive office.
The Biden administration announced an interagency working group in January to look at the impacts on communities transitioning away from coal. The Hogan administration could also work with the state Department of the Environment and Department of Labor to help soften the blow of coal-worker layoffs, Smedick said.
For more stories from Maryland Matters, visit www.marylandmatters.org.