New Jersey Left With One Coal Plant Standing After PSEG Closures

New Jersey will be left with one coal-fired power plant after Public Service Enterprise Group Inc. announced it would shut down its remaining two facilities in the state next year, the latest casualties of competition from cheap natural gas.

The Hudson plant in Jersey City and the Mercer facility in Hamilton Township will be retired on June 1, the Newark-based company said Wednesday in a statement. Neither plant cleared the last two capacity auctions held by PJM Interconnection LLC, the grid operator for the mid-Atlantic region.

Coal for power generation has been losing market share to gas as tougher emissions standards and slowing demand pressure the fuel. New Jersey gets less than five percent of its power from coal, down from one-fifth in the 1990s, according to the U.S. Energy Information Administration. Most of its coal-fired plants have already been closed or converted to natural gas.

“What’s important is that this is a major step forward for the entire region,” said Jeff Tittel, director of the New Jersey Sierra Club, who said the announced shutdowns would leave the state with just one coal plant. “Within a couple of years there will not be a coal facility from Trenton through to Maine and from Jersey City all the way to Buffalo.”

In the third quarter, PSEG expects to book one-time charges related to the closures of $40 million-$70 million for the Hudson plant and $35 million-$77 million for the Mercer unit. The shutdowns will also result in non-cash charges to earnings of $560 million to $580 million this year and $940 million to $960 million in 2017.

“The sustained low prices of natural gas have put economic pressure on these plants for some time,” Bill Levis, president and chief operating officer of PSEG Power, said in the statement. “In that context, we could not justify the significant investment required to upgrade these plants to meet the new reliability standards."

Mercer was opened in 1960 and has a capacity of 632 megawatts. Hudson, which started in 1968, can generate as much as 620 megawatts. They have about 200 employees together.

Public Service said it’s considering all options for the future use of the sites.

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