Company continues its transition away from coal with retirement of Zimmer Power Plant
Vistra (NYSE: VST) today announced it will close the Zimmer Power Plant in Moscow, Ohio, by mid-2022. The company had previously announced the plant would retire no later than 2027 based on environmental regulations. The early retirement decision comes after the plant failed to secure any capacity revenues in the latest auction held in May by the grid operator, PJM.
“The Zimmer coal-fueled power plant has recently struggled economically due to its configuration, costs, and performance. The PJM capacity revenues are critical to Zimmer, and unfortunately, without them, the plant simply doesn’t make money,” said Curt Morgan, chief executive officer of Vistra. “This decision did not come easy. Our people work hard every single day to provide power to Ohioans and have done a number of things over the past few years to sustain the life of the plant and improve its economics. But despite their best efforts, the disappointing auction results, along with other challenging factors, make continued economic operation impossible. We’re left with a difficult but necessary decision of retiring the plant.”
May’s PJM capacity auction for 2022-23 cleared much lower than expected – nearly 50% lower than the 2021-22 auction in the zone where Zimmer is located. Due to this lower clearing price, Zimmer was unable to sell any generating capacity in the auction. In addition, indications suggest future PJM capacity auctions have the potential to experience low clearing price results, as well, resulting in a multimillion-dollar loss in expected future capacity revenues compared to previous years.
Vistra plans to retire the site on May 31, 2022. As it is doing at its plant sites across the country, the company will evaluate the Zimmer site for potential investments in renewables or grid-scale battery storage, utilizing existing infrastructure.
Vistra always strives to provide workers and communities with as much advanced notice as possible ahead of a plant’s retirement. The delayed running of the PJM capacity auction for the 2022-23 planning year compressed the opportunity to provide more time, in this instance. As always, Vistra will support its workers during this period. The company’s commitment to the Moscow and Clermont County communities is consistent with its desire to help provide a responsible transition for local communities following plant closures.
Zimmer Power Plant opened in 1991 and currently has approximately 150 employees. The plant is a single-unit site with a capacity of 1,300 megawatts.
Source: Company Press Release