Southeastern Ohio’s Gavin Coal Plant Sale from Private Equity to Private Equity: What Will Be the Fate of the 50+ Year-Old Plant?

 

     I feel I have to write about this since it is near where I live and where I may get my power (I am not sure about that, but it is probably from that one or one of the other coal plants in the region). The General James M. Gavin Power Plant is rather infamous for its emissions. Black dust coated local residents’ homes and belongings on several occasions before better pollution abatement equipment was installed. Also infamously, many homes in the town of Cheshire, Ohio were bought out by the power company, and the town is partially abandoned. There is another coal-fired plant just down the road from it owned by Ohio Valley Electric Corporation (OVEC). I once interviewed for a job there doing environmental testing.

     The Gavin Plant is one of the largest power plants in the state at 2600MW, with two 1300MW units. The first unit became operational in 1974 and the second in 1975. According to Wikipedia:

 

“In February 2017, the plant represented slightly more than 11% of the total electric generation capacity in Ohio according to the Energy Information Administration (EIA).”

     As shown below, the plant is the worst emitter of PM2.5 particulate matter in the U.S.

     It is owned by Lightstone Generation LLC, a 50–50 joint venture of The Blackstone Group L.P. and ArcLight Capital Partners. They bought it from American Electric Power (AEP) in 2017. The buyer is another private equity company, Energy Capital Partners.

     The plant is said to be the 5^th largest CO2 emitter in the U.S. According to Sierra Club it is the “dirtiest” coal plant in the U.S. They attribute 244 premature deaths to the plant. Lucky that the general area is sparsely populated and also lucky for me that I am upwind of the plant.

     The sale is raising concerns about the long-term viability of the plant. The OVEC plant is just downriver, 20 years older, and still operating. People are concerned about their jobs at the Gavin Plant and the plans for its future. My guess is that it is likely to be replaced by gas-fired units, which require fewer workers to operate. Another big concern with the plant is the latest coal combustion residuals (CCR) rule that requires liners to be installed at coal ash slurry ponds. With 50 years of operation, those slurry ponds have gotten very large.

     The buyer, Energy Capital Partners (ECP), purports to be a leading investor in the energy transition. Thus, it is being speculated that they will close the plant. According to the Institute for Energy Economics and Financial Analysis:

 

“Gavin and its CO2 emissions will be managed separately, indicating that ECP knows they are a problem, and put under the control of General Coal Purchaser LLC. This entity initially will be 100 percent controlled by ECP, but the company says it may sell as much as 40 percent of the Gavin plant to another firm, Javelin Global Commodities. While touting the gas plants’ strong performance, Moody’s latest analysis (released before the ECP purchase) highlighted the “ongoing environmental risks faced by the nearly 50-year-old Gavin plant.”

 

     Private Equity Stakeholder Project (PESP) and Sierra Club recommended the closure of the plant no later than 2028. 50 years is the average age of coal plants at their retirement. As the plants age their performance declines and this also means that their emissions per unit of energy produced also decline, barring any emissions abatement upgrades.

 

     More information about the plant from Wikipedia:

 

“In November 2022, the EPA ordered the utility to stop dumping coal ash into unlined storage ponds and speed cleanup of the site. The plant may have to pause or even cease operations in order to comply with the order. The order becomes effective 135 days after publication in the Federal Register. If additional time is needed, the order included a process to address demonstrated grid reliability issues.”

 

“Gavin is equipped with a suite of air quality controls. These include selective catalytic reduction units that reduce nitrogen oxide (NOx) emissions by 82%; flue-gas desulfurization (FGD) units (scrubbers) that remove 94% of sulfur dioxide (SO2) emissions and electrostatic precipitators for particulate control. Together the controls reduce mercury emissions by up to 91% and particulates by 99%.”

 

“The plant contributes approximately $6 million a year in property taxes that support the Gallia County school system and government. The plant is Gallia County's largest taxpayer and makes annual contributions of more than $50,000 to local charities and non-profits.”

 

 

 

References:

Gavin coal plant sale leaves Ohio communities in limbo. Farah Siddiqi. Public News Service. October 17, 2024. Gavin coal plant sale leaves Ohio communities in limbo (msn.com)

2023 Greenhouse Gas Emissions from Large Facilities. U.S. EPA Data Portal. EPA Facility Level GHG Emissions Data

Private equity firm that is a “leading investor in the energy transition” to buy Gavin coal plant. October 10, 2024. Dennis Wamsted and Seth Feaste. Institute for Energy Economics and Financial Analysis. Private equity firm that is a “leading investor in the energy transition” to buy Gavin coal plant | IEEFA

PESP sends letters to Blackstone, ECP urging Gavin coal plant retirement. September 12, 2024. Private Equity Stakeholder Project. PESP sends letters to Blackstone, ECP urging Gavin coal plant retirement (pestakeholder.org)

Gavin Power Plant. Wikipedia. Gavin Power Plant - Wikipedia

Out of Control: The Deadly Impact of Coal Plant Pollution. Sierra Club. Beyond Coal. Out of Control: The Deadly Impact of Coal Plant Pollution | Beyond Coal (sierraclub.org)