Another power plant that buys Wyoming’s coal is facing early retirement, the latest in the trend of disappearing customers for Powder River Basin coal.
Wisconsin’s largest utility, We Energies, could shut down the Pleasant Prairie coal plant in southeastern Wisconsin as early as next year, the Milwaukee Journal Sentinel reported Tuesday.
Last year, the plant bought coal from five different mines, all of them in Wyoming, according to federal data. The largest supplier over the last four years has been Cordero Rojo, a Cloud Peak Energy mine just south of Gillette.
The Powder River Basin’s two largest mines account for nearly a quarter of national coal production. Companies ship to dozens of states, supplying about 30 percent of the country’s electricity needs.
Companies argue that they can stand their ground in the new normal of coal demand, but are also paying attention to details that can make them vulnerable, from the weather forecasts to regulations. Meanwhile, environmental advocates say the closure trend should be embraced as part of a transition to green energy, and were congratulating the Wisconsin utility this week for its related plans to bring on 350 megawatts of solar power.
The early retirement trend has not abated over the last year, despite the political support coal has found in Washington and the selling point that baseload power is essential to keep the lights on.
Pleasant Prairie was a baseload plant, designed to burn through about 13,000 tons of coal every 24 hours to meet the basic electricity demands of its customers. But the plant has been operating at reduced capacity in recent years, making it more expensive to keep alive. It was shut down completely for three months in the spring.
Compared to many of the coal closures of recent years, Pleasant isn’t a senior citizen either. It was built in the early ‘80s.
Still, the potential cost of closing the plant may be a sticking point to We Energy’s plan as consumer groups appeal to Wisconsin’s utility regulator, according to the Journal.
Similar concerns were raised in October, when Texas’s Vistra Energy announced the closure of three coal-fired plants, two of which bought Wyoming coal. The cost-benefit of closure eventually found approval from utility regulators.
For Wyoming, the Wisconsin’s plant closure isn’t make or break for the industry. None of the plant closures are alone. But the trend is a nagging worry.
A spokesman for Cloud Peak said the declining demand is a concern shared by all producers, but that company is poised to compete in the coal market thanks to its range of coal to sell, from 8,400 to 9,300 BTU. Cloud Peak is also betting on its cost advantage. It’s cheap, relative to other basins, to dig coal in the thick seams of the Powder River Basin.
“According to all reasonable projections, PRB coal will remain critical to utilities meeting U.S. electricity demand for decades to come,” Cloud Peak Spokesman Rick Curtsinger said in an email. “We have also been encouraged by outreach from coal-fueled plants we have not historically supplied that are now interested in diversifying their supply base.”
Peabody Energy, which also sold coal to Pleasant Prairie from its Caballo and North Antelope Rochelle mines last year, has said recently that the company is braced for coal closures in the coming years and believes its Wyoming mines can still compete in the tighter market. Its reasoning is similar to that of Cloud Peak: Wyoming coal is cheap to produce, new customers are reaching out and their mines offer a diverse product.
Still recent earnings calls from companies operating in Wyoming, like Cloud Peak, Peabody and Arch Coal, reveal how tight the new coal normal is becoming, particularly for the lower-heat coal that some operators are struggling to unload this year.
Environmental groups were quick to link the coal closure with the hearing on the Clean Power Plan that took place Monday and Tuesday in Charlotte.
Advocates say the decline in coal use evidenced in these closures will continue despite political promises of a revival.
“On the same day that President Trump’s EPA administrator is promising coal’s comeback, Wisconsin’s largest utility is forging ahead with a plan that reduces coal use while betting big on solar,” Elizabeth Katt Reinders, campaign representative for the Sierra Club Beyond Coal Campaign, said in a statement. “This welcome announcement is yet another example of the inevitable shift to safer and more cost effective clean energy.”
The Trump Administration has promised to bring miners back to work as Washington ends what some called the “war on coal.” And the administration has worked to keep this promise through scaling back environmental rules like the CPP.
But the two-day public hearing on the administration’s decision to undo the Clean Power Plan ended with a stalemate of conflicting opinions and federal obligations, according to numerous reports.
Meanwhile, Wyoming’s coal sector continues to grip to its share of the pie, as natural gas prices remain low and the cost to build new renewable plants continues to fall.