On February 29, 2012, GenON Energy, Inc. (“GenON”) announced its 2011 financial results, and plans to deactivate 3,140 MW of generating capacity in the PJM Interconnection LLC (“PJM”) region between 2012 and 2015.  GenON’s news release pointed to costs for additional environmental controls and stated that “forecasted returns on investments necessary to comply with environmental regulations are insufficient.”

GenON will have 19,490 MW of generating capacity after the deactivation of the announced units, and various other “fleet reduction measures,” including the expiration of a tolling agreement for a 630 MW facility in Florida.  The deactivation of plants in PJM will affect the following units between June 2012 and May 2015:

  • 460 MW Elrama Plant
  • 217 MW Niles Plant
  • 401 MW Portland Plant
  • 732 MW Avon Lake Plant
  • 330 MW New Castle Plant
  • 597 MW Shawville Plant
  • 243 MW Titus Plant
  • 160 MW Glen Gardner Plant

In its news release, GenON indicated that since 2000 it has invested $2.4 billion in environmental controls for the existing plants which will remain in their fleet.  GenON also indicated that it will invest between $586 and $726 million over the next ten years for environmental controls at some of its generating stations.  In its Fourth Quarter 2011 Earnings presentation dated February 29, 2012, GenON cited the Mercury and Air Toxics Standards Rule as a “driver” for closing the Elrama, Niles, Avon Lake, New Castle and Titus plants. 

GenON’s news release concerning the deactivation of plants and 2011 results is available here.

A copy of GenON’s Fourth Quarter 2011 Earnings presentation is available here.