Connectiv plans to close B.L. England Plant (Palermo)

Sorry, I don't have a link for this article, just the following text sent to me...this is bad news folks:

May 1, 2004

Conectiv plans to close B.L. England
By MICHAEL MILLER Staff Writer, (609) 463-6712, E-Mail

UPPER TOWNSHIP - Conectiv Power Delivery, having failed to find a buyer for its B.L. England power plant, plans to close it in three years.

The Wilmington, Del.-based company told its 130 employees the news Friday, spokeswoman Betty Kennedy said.

Under the proposal filed Friday with the New Jersey Board of Public Utilities, Conectiv would close the plant on the Great Egg Harbor Bay by the end of 2007. Kennedy said the 40-year-old plant needs pollution upgrades to one of its two coal-fired boilers that would be too costly to justify.

"These boilers have been upgraded every year. But every year it becomes more difficult to meet stringent air regulations," she said.

In 1995, the plant installed an $80 million scrubber on one of its two coal-fired boilers to curb sulfur emissions. But the plant is still one of the top-10 biggest polluters in New Jersey.

The company faces the prospect of adding another scrubber to its other coal-fired boiler. The plant has a third boiler that burns oil for fuel. These upgrades likely would cost far more than $80 million.

Conectiv plans to improve its transmission system instead, Kennedy said.

The plant's closure could have a huge impact on Upper Township taxpayers. The township gets more than $6 million per year in state tax relief for hosting the coal plant. As a result, its 12,000 residents pay no municipal property taxes.

"Are we concerned? Absolutely. Are we panicking? No," Mayor Richard Palombo said.

Kennedy said under a 1999 law, the rebates called Energy Receipts Taxes are no longer tied directly to the operation of the power plant. Lawmakers would have to decide whether to end Upper Township's rebates, she said.

"The good news is it's not closing tomorrow," Palombo said. "We need to do our homework."

The plant produces 447 megawatts of electricity, enough to power all of Cape May County on the hottest day of the year. Conectiv will be working with state regulators to ensure the power grid can meet the needs of Cape May, Cumberland and Atlantic counties without the plant, Kennedy said.

Conectiv planned to get out of the energy-producing business in 2002 by selling B.L. England and three other plants to NRG Energy for $178 million. Of the total price, the company was asking $68.5 million for B.L. England.

But NRG withdrew its offer in the wake of the Enron scandal and the resulting energy-market collapse. Kennedy said Conectiv put the plant back on the auction block but got no takers.

"Would we sell it if there was an offer? It would be considered," she said.

The company plans to keep most or all of its 130 employees, Kennedy said.

"This recommendation is no reflection on these workers. These are highly skilled and technical workers," she said.

The BPU must agree to the plant's closure, but Kennedy said that is a formality.

"We believe this plan will be approved. Let's be honest," she said.

To e-mail Michael Miller at The Press:

[email protected]

Yes, I heard about this unfortunate news on Trainorders, but I wouldn't panic yet. A lot can happen between now and 2007. If the environmentalist wackos get their way then it will close however!

Steve

Interesting stuff...One would have to think what would happen to the fate of the Beesley's southeast of Winslow? Would seem to be quite a problem for CMSL if they ever wanted to go north to Hammonton to meet the ACL...

NJ Transit owns the line from mp 26.1 at Winslow Jct all the way to Palermo (mp 59.6) where the lead to the power plant is. It was acquired (by NJDOT Commuter Operating Agency at that time) from Conrail in 1978 as part of the "900 day" option, The line from Tuckahoe to Cape May was also acquired at the same time. The line beyond Palermo to Ocean City had been acquired by the state on 4/1/76

NJT does NOT own the lead to the power plant.

CRRNJ878 wrote:Interesting stuff...One would have to think what would happen to the fate of the Beesley's southeast of Winslow? Would seem to be quite a problem for CMSL if they ever wanted to go north to Hammonton to meet the ACL...

Well remember, CMSL is going to start up this freight service at Woodbine pretty soon...those cars have to get down there somehow. They'll still need the Beesley's from Tuckahoe to Winslow...

However, it seems very likely and even probable that the track between 53.0 (or maybe 54.0 if they want to leave some space for shifting at Tuckahoe) to the plant will be abandoned if the plant is closed.

The possibility would exist for CMSL to also lease the Beesley's from Tuckahoe to Winslow from Transit, just like they lease the Cape May Branch right now...this is if car movements are not high enough to make it worth-while for Conrail...

I suspect this is a ploy by Connectiv to get an exemption for the plant. There hasn't been a new full-sized power plant built in this state in 20 years, yet demand has probably tripled in that time. I doubt it gets shut down.

I don't think its a ploy.

"Another $22.6 million was invested for transmission upgrades necessary to connect to the grid 1,719 megawatts of new generating capacity in the Garden State. That’s enough electricity for about 1.4 million residences. An additional 3,659 megawatts of new generation is actively under study for New Jersey."

The above is what has happened in NJ in the last 3 years. Lots of new generation (about four times the capacity of the England station) and transmission built and planned. Prices for generation capacity, because of a surplus, have fallen to very low levels making plants like England difficult to sell and not worth much. (It’s also public knowledge that PSEG Power’s Hudson Steam Station in Jersey City is also under consideration for closing or mothballing for much the same reasons – no longer economic.)

Pepco Holdings, Conectiv’s owner, has a corporate strategy of getting out of the generation business and concentrating on delivery. The desire to sell or close the plant and build transmission is very real. Moreover, for some years, Conectiv’s generation-related business plan has been to retain only so-called “mid-merit” generation. That means generation that can be relatively quickly started and stopped, between the generation base load which runs all the time (such as a nuclear unit), and combustion turbine peaking units that only run a few day-equivalent a year. The B. L. England units, being coal-fired steam are slow and expensive to start up and stop, and would be best suited for base load. Not close to mid-merit units. Also at 40 years, they are becoming a bit long in the tooth.

Conectiv is constructing some significant new and reinforced transmission to correct some high load low voltage issues that only the England units can correct. Once that transmission is in place in a couple of years the England units will not be needed for reliability.

It’s not unlikely that some developer will seriously consider building new combined cycle generation at the site, if a natural gas fuel supply can be obtained. Or, if the plant does sell for a very very low price, it might be economic for a developer to install state of the art emissions controls and continue to operate it. It would have to be base load, running continuously, but on the other hand, the new transmission would tend to lower the price of energy imported from elsewhere which would make this latter potential unlikely.

The company I work for did an environmental due diligence of the Conectiv assets some time back for a company that was interested in purchasing the various coal facilities. At the time the selling price was too high, especially given the concern over pending coal plant mercury control regulations that may require a substantial investment in control equipment installation.

Although old coal plants may be retired, there has been a pretty decent increase in proposed development of new coal-fired plants. The new boiler technology results in much lower emissions even before add-on controls are considered. The depletion of natural gas reserves here and in Canada means that we will become more dependent on imported (liquefied) natural gas from the Middle East. As such, natural gas prices are not likely to head back down, making coal a more attractive fuel. Coal gasification in a zero oxygen environment is also showing promise - the resultant gas burns very clean. Also, Pennsylvania is pushing culm-fired power plants as a means to generate electricity while slowly getting rid of the numerous culm piles that exist throughout that state. The residual ash is from these plants can be used to treat acid-mine drainage as well.

Coal will still be around in the future, likely more so than now; this will certainly benefit the railroad industry.

On a somewhat related topic, anyone hear anything about the plant at Deepwater? That one staying open? I've got mixed rumors flowing in on this one...

Could the CMSL afford to lease the Beesley’s from Tuckahoe to Winslow? Wouldn’t millions of dollars be needed for crossing gates in order to restore passenger service on the Beesley’s? What kind of trackwork is needed to have the CMSL connect with the ACL? A little of topic but is the Ocean City spur, past Palmero, with no Crook Horn Bridge, in permanent retirement? Lets hope not…you never know…right?