Pennsylvania’s Homer City Generation facility is in financial trouble, according to the Pittsburgh Post-Gazette.
The 1,884-MW coal-fired power plant was saved from a 2012 bankruptcy via a joint venture headed by GE Capital, which evolved the plant from one of the state’s dirtiest coal-fired facilities to one of its cleanest.
Much of the blame for the plant’s financial troubles can be attributed to inexpensive natural gas, which edges out coal as the cheapest source of baseline electricity, said the Post-Gazette. The plant has seen power prices and associated revenue decrease over the last year, and debt payments for the facility are increasingly financially burdensome.
The plant has paid $750 million to install scrubbers on two of its three units to reduce sulfur dioxide emissions. The third unit was already updated. Between last November and April, GE Capital took an $800 million impairment charge on the asset and says it plans to exit the investment over time.
Currently the facility employs 271 workers, also drawing coal from surrounding mines. A closure would not only impact the employment base in the community, but also coal production at local Rosebud Mining Co. in Kittanning.
Earlier this year, Homer City completed cost studies regarding the addition of gas-fired units to the plant. In April, the facility withdrew plans for the expansion.
Homer City’s next debt payment is due in October.