The village of Moscow, Ohio, population 185, sits along U.S. 52 about 18 miles from the Interstate 275 outer belt around Cincinnati. Standing at the post office parking lot and looking toward the skate park, you can’t miss the William H. Zimmer power plant. Its single smokestack and its cooling tower dominate the landscape there at Moscow.
The plant has been in operation since 1991, making it one of the newer coal-burning power plants in this part of the Ohio Valley, if not the newest. It originally was to have been a nuclear power plant, but construction problems led its developer to build a coal-burning plant instead.
About 150 people work at the plant. In a common occurrence these past few years, Zimmer’s owners announced Monday the plant will be retired no later than May 31, 2022, ahead of its scheduled retirement in 2027.
The reason for Zimmer’s closure could indicate problems for other coal-burning plants in this area. It’s also a problem for West Virginia, as most of the coal Zimmer burns comes from the Mountain State.
The problem is the PJM capacity auction for 2022-23. PJM is the regional grid operator from New Jersey to eastern Illinois and from Lake Erie south to the North Carolina border. In short, other power plants in the region can sell power into the grid for less than Zimmer.
“The Zimmer coal-fueled power plant has recently struggled economically due to its configuration, costs, and performance. The PJM capacity revenues are critical to Zimmer, and unfortunately, without them, the plant simply doesn’t make money,” Curt Morgan, chief executive officer of Vistra, the plant’s Texas-based owner, said in a statement issued Monday.
As explained in the Vistra statement, “May’s PJM capacity auction for 2022-23 cleared much lower than expected — nearly 50% lower than the 2021-22 auction in the zone where Zimmer is located. Due to this lower clearing price, Zimmer was unable to sell any generating capacity in the auction. In addition, indications suggest future PJM capacity auctions have the potential to experience low clearing price results, as well, resulting in a multimillion-dollar loss in expected future capacity revenues compared to previous years.”
In 2019, the most recent year for which final figures are available, Zimmer took delivery of about 1.5 million tons of coal. That’s equal to about 2,900 barges or 15,326 railroad cars. About 921,719 tons of that came from mines in West Virginia.
The closure might not be total loss for the Moscow area, though. In its announcement Monday, Vistra said, “As it is doing at its plant sites across the country, the company will evaluate the Zimmer site for potential investments in renewables or grid-scale battery storage, utilizing existing infrastructure.”
So Zimmer goes from nuclear to coal to renewables (maybe).
Zimmer’s not alone in seeing its future going dim, as has been noted before. It will become at least the fourth plant along U.S. 52 between Cincinnati and Portsmouth, Ohio, to have been retired in recent years, with Walter C. Beckjord, J.M. Stuart and Killen being the others. The Miami Fort power plant on the other side of Cincinnati is scheduled for retirement before the end of 2027.
Zimmer and the other plants are in Ohio, where the retail electricity market is deregulated. Unlike in West Virginia, power plant owners in Ohio do not have a profit margin guaranteed by a public service commission. Ohio’s power supply has changed over to natural gas and renewables at a much faster rate than West Virginia’s has, where the transition, if it exists, is barely noticeable other than wind farms along its eastern border.
Ohio’s coal-fired plants were built in the days when utilities owned the entire process of generating power to transmitting it across large regions to delivering it to homes and businesses. Deregulation separated those components around time fracking made natural gas more affordable and the development of renewables became politically and economically popular.
The idea of deregulating the West Virginia retail market has rarely come up in the West Virginia Legislature, if ever. Deregulation could damage the market for West Virginia’s coal-burning plants the same as it has in Ohio.
Yet what happens in Ohio does affect West Virginia. The Pleasants Power Station in Pleasants Count has an uncertain future, as its output is tied more to Ohio than to West Virginia.
For a few years, what’s been happening with Zimmer and other power plants in Ohio has me concerned about what could happen with other coal-burning power plants in Ohio. Maybe in the next few weeks we’ll get some idea of how the recent PJM auction will affect them and Pleasants, too, as plant owners sort through the numbers and determine which plants will continue operating and which won’t.