SYS-CON MEDIA Authors: Adine Deford, Cynthia Dunlop, Harry Trott, Xenia von Wedel, Peter Silva

News Feed Item

IEEFA Report: Connecticut's Last Coal-fired Power Plant Is In Critical Financial Condition, Community Needs To Plan For Transition

Report Finds Handwriting May Already Be On the Wall for 45-Year-Old Coal Plant Whose Pre-Tax Earnings "Fell off the Cliff" in 2009 and Are Unlikely to Recover to the High Pre-2009 Levels; Lower Natural Gas Prices, Lower Energy Market Prices & Other Trends Too Much to Overcome.

HARTFORD, Conn., Jan. 23, 2014 /PRNewswire-USNewswire/ -- A new financial analysis report cautions that PSEG's Bridgeport Harbor Unit 3 – the last coal-fired power plant in Connecticut and one of the few remaining such facilities in New England – has been in deep financial trouble since 2009, and is unlikely to be financially viable for the long-term.  The report from the independent and nonprofit Institute for Energy Economics and Financial Analysis (IEEFA) is intended to help policymakers and residents near Bridgeport Harbor Unit 3 understand the need to start planning now for the retirement of the coal-fired power plant.

The IEEFA report notes that Bridgeport Harbor Unit 3 has been buffeted for years by the same economic pressures -- low natural gas prices, low market prices, and flat or declining electricity demands – that have led to the retirement of more than 13,000 megawatts (MW) of the country's coal-fired power plant fleet from 2009-2012.

IEEFA released an earlier report reaching similar conclusions about the prospects for the Somerset, Massachusetts-based Brayton Point Station.  Immediately after making investments of more than $1 billion in pollution control equipment, Dominion Resources sold the 1,580 MW Brayton Point Station for the fire-sale price of an estimated $55 million, reflecting a substantial financial loss. Within a month of closing on that transaction, the new owner gave notice of its intent to retire Brayton Point in 2017.

Sandy Buchanan, executive director, IEEFA, said: "Community leaders and others would be well-advised to start planning now for the shuttering of Bridgeport Harbor 3.  The financial handwriting is already on wall for this power plant that is so old that it was launched when LBJ was President of the U.S. There is no reason to believe that Bridgeport Harbor can somehow survive the negative financial pressures that already have taken down scores of other coal-fired power plants."

David Schlissel, report author and director of resource planning analysis, IEEFA, said: "The future of the Bridgeport Harbor Unit 3 coal plant looks bleak. The bottom line here is that PSEG Power's pre-tax earnings from Bridgeport Harbor Unit 3 dropped off a cliff in 2009. Based on currently expected future circumstances, there is no credible reason to expect that these pre-tax earnings will again reach the high levels achieved in 2007 and 2008.  PSEG's after-tax profits from the plant will be even lower because it has to pay taxes, interests and depreciation from these pre-tax earnings."

Cathy Kunkel, report co-author and IEEFA research fellow, said: "Bridgeport was designed to provide baseload electric power, but due to changes in the grid, most significantly the availability of substantial amounts of low-cost power from natural gas-fired combined cycle units, Bridgeport is now being relied on for peaking service when natural gas-fired units are constrained.  Long start-up times, as much as a full day to reach full power, make it difficult for Bridgeport and other aging coal power plants to serve this peak service, back-up role."

 Highlights of the report include the following:

  • Bridgeport Harbor Unit 3's capacity factor for 2012 was only 3 percent and for the first 10 months of 2013 was only 15.9 percent. The IEEFA report states that the coal-fired power plant is unlikely to reach the 71-87 percent capacity factors achieved before the collapse of natural gas prices in 2009.
  • New England's current energy and peak load forecasts are relatively flat through 2022.  Consequently, instead of serving higher energy loads, Bridgeport Harbor Unit 3 will have to continue to compete with low cost natural gas-fired units and new renewable resources to serve existing energy demands.
  • Circumstances that are anticipated to drive continued low pre-tax earnings from Bridgeport Harbor are: low market pricing for natural gas; the addition of increased gas pipeline supply into the Northeast, starting sometime in 2016-2018; relatively high operating costs and low energy market prices in turn necessitating very little power generation from the plant except for in peak winter months; relatively flat demand for energy in the New England market; and possible federal action on climate change resulting in higher costs for greenhouse gas (GHG) emissions by the end of this decade.

ABOUT IEEFA

The Institute for Energy Economics and Financial Analysis (IEEFA) conducts research and analyses on financial and economic issues related to energy and the environment. The Institute's mission is to help facilitate the transition to a diverse, sustainable and profitable energy economy and to reduce dependence on coal and other non-renewable energy resources.  For more information, go to http://www.ieefa.org on the Web.

EDITOR'S NOTES: The IEEFA study, related PowerPoint presentations, and a streaming audio replay of this news event will be available as of 3 p.m. EST on January 23, 2014 at http://www.ieefa.org.

SOURCE Institute for Energy Economics and Financial Analysis (IEEFA), Cleveland, OH

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
"We help companies that are using a lot of Software as a Service. We help companies manage and gain visibility into what people are using inside the company and decide to secure them or use standards to lock down or to embrace the adoption of SaaS inside the company," explained Scott Kriz, Co-founder and CEO of Bitium, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
15th Cloud Expo, which took place Nov. 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, expanded the conference content of @ThingsExpo, Big Data Expo, and DevOps Summit to include two developer events. IBM held a Bluemix Developer Playground on November 5 and ElasticBox held a Hackathon on November 6. Both events took place on the expo floor. The Bluemix Developer Playground, for developers of all levels, highlighted the ease of use of Bluemix, its services and functionalit...
The 4th International DevOps Summit, co-located with16th International Cloud Expo – being held June 9-11, 2015, at the Javits Center in New York City, NY – announces that its Call for Papers is now open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's large...
Some developers believe that monitoring is a function of the operations team. Some operations teams firmly believe that monitoring the systems they maintain is sufficient to run the business successfully. Most of them are wrong. The complexity of today's applications have gone far and beyond the capabilities of "traditional" system-level monitoring tools and approaches and requires much broader knowledge of business and applications as a whole. The goal of DevOps is to connect all aspects of app...
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, discussed how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP HANA...
When an enterprise builds a hybrid IaaS cloud connecting its data center to one or more public clouds, security is often a major topic along with the other challenges involved. Security is closely intertwined with the networking choices made for the hybrid cloud. Traditional networking approaches for building a hybrid cloud try to kludge together the enterprise infrastructure with the public cloud. Consequently this approach requires risky, deep "surgery" including changes to firewalls, subnets...
Want to enable self-service provisioning of application environments in minutes that mirror production? Can you automatically provide rich data with code-level detail back to the developers when issues occur in production? In his session at DevOps Summit, David Tesar, Microsoft Technical Evangelist on Microsoft Azure and DevOps, will discuss how to accomplish this and more utilizing technologies such as Microsoft Azure, Visual Studio online, and Application Insights in this demo-heavy session.
DevOps is all about agility. However, you don't want to be on a high-speed bus to nowhere. The right DevOps approach controls velocity with a tight feedback loop that not only consists of operational data but also incorporates business context. With a business context in the decision making, the right business priorities are incorporated, which results in a higher value creation. In his session at DevOps Summit, Todd Rader, Solutions Architect at AppDynamics, discussed key monitoring techniques...
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water,...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happe...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and asse...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!