Published: June 21, 2021 |

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When Gov. Tom Wolf and Senate Democrats on Monday unveiled a bill that would allot the proceeds of the Regional Greenhouse Gas Initiative if Pennsylvania joins the regional carbon-trading program in 2022, the names of two recent coal casualties were on their lips: Cheswick and Blacksville No. 2.

Both the Cheswick Generating Station and Blacksville No. 2, the last coal-fired power plant in Allegheny County and a big mine on the Pennsylvania-West Virginia border, saw announcements by their respective owners that they would be closing by September. GenOn Energy said Cheswick and two other coal-fired power units, one in Ohio and the other in Maryland, were no longer economically viable in the current market conditions. Cheswick’s shutdown date is Sept. 15.

The market, where coal-fired power generation is under assault from cheaper natural gas, also was a big factor weighing on the Monongalia County Coal Co. mine, known as Blacksville No. 2, when it was owned by Consol Energy Inc. American Consolidated Natural Resources, the former Murray Energy Co., will be shutting the mine in September as well.

In a news conference Monday, Wolf said a bill to spend part of the proceeds on worker retraining and economic development in communities that are hardest hit by the closures was the best way to deal with what he called the coming energy transition.

“With the Cheswick situation, we have a great example of what’s going to happen,” Wolf said.

RGGI is a carbon trading program that is in place in 11 Northeast states that seeks to limit carbon dioxide emissions from the power generation sector between restrictions on total emissions and an auction process that trades credits for generators that go above their limits. Wolf, who announced in 2019 in Pittsburgh that he wanted the state to join RGGI, believes he has the power under an executive order. But the GOP-controlled General Assembly disagrees, and just Monday the state Senate — including three Allegheny County Democrats — voted 35-15 to potentially block Pennsylvania from joining RGGI. House BIll 119 is now going back to the House of Representatives.

Republicans, and some Democrats, have bristled at the idea of Pennsylvania joining RGGI without the approval of the Legislature. They’ve been aided by the Power PA Jobs Alliance, a coalition of business, coal companies, and trade unions who say that RGGI will kill what’s left of Pennsylvania’s coal industry, both mining and power plants, as well as the union workers who serve them.

“All of Pennsylvania’s coal plants operate at very narrow margins. Cheswick’s pending closure is a prime example of what will happen if Pennsylvania were to join RGGI,” said Pennsylvania Coal Alliance President Rachel Gleason.

Shawn Steffee, business agent of Boilmakers Local 154, has also been a vocal opponent of RGGI and a leader in the unions’ fight against it. He said that union members are going to lose hours that they would have spent working on the Cheswick plant with the closure, and there were boilermakers working there the day the closing was announced. He said three other coal-fired power plants in Pennsylvania, including Homer City in Armstrong County, had enough proceeds from the PJM Interconnection capacity auction to remain open through at least the end of 2023.

But he said RGGI is going to add more stress to the coal-fired power plants.

“It comes back to the environmental push against all these plants that they can’t overcome and the possibility that it’s going to cost them (more) to stay open,” Steffee said.

Steffee said the Wolf administration should take heed of the vote in the Senate, given the bipartisan sentiment against unilateral action in joining RGGI.

“This tells me they should go through legislation more than ever,” Steffee said.

One analyst, Seth Feaster of the Institute for Energy Economics and Financial Analysis, believes there’s meaning in the fact that the Cheswick and Blacksville closings were made long before RGGI will take effect in Pennsylvania.

It’s “very telling about how the transition is happening with or without policies in place like RGGI,” Feaster said. “A lot of these changes are being driven by utilities and the demand for coal, which is continuing to decline. So you are going to have this constant drumbeat in places like Pennsylvania where these mines and plants are closing.”

Feaster believes that the market has turned against coal and that even a recent spike in thermal coal markets is only temporary. The pace of the energy transition, he said, will be stronger.

“Those plants are representative of how the transition is happening. They are being used less and less and it finally becomes untenable economically for them to stay open,” Feaster said.

Gleason, however, thinks RGGI was a factor with Cheswick.

“The looming threat of joining RGGI most certainly impacted future projected costs associated with the commitment to run between June 2022 and May 2023,” Rachel Gleason said.

“The loss of the family-sustaining jobs will be devastating for blue-collar families and the loss of tax revenue will be devastating to communities,” added Gleason.

Source: Pittsburgh Business Times

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