Longview Power Plant Files for Bankruptcy, Natural Gas Expansion Continues

One of the newest, most-efficient coal-burning power plants in the U.S. has filed for Chapter 11 bankruptcy reorganization in the face of lower demand for electricity and depressed prices.

In its filing, announced in an April 14 news release, Longview Power LLC said it is seeking reorganization “as a result of substantially lessened demand for electricity due to long-term power-pricing pressure caused by cheap natural gas, an unseasonably warm winter, and the COVID-19 pandemic and resulting economic impact, which collectively have severely depressed power prices.”

Longview Power Plant, in Maidsville, W.Va., near Morgantown, has been operating since 2011 using clean-coal technology. The plant is in the midst of an expansion that will include a combined-cycle plant that will use turbine technology powered by natural gas from the abundant Marcellus shale in this area and the addition of a solar farm. Those expansions are expected to continue and are not included in the bankruptcy.

The U.S. Energy Information Administration, in its April short-term energy outlook, forecasts that total U.S. electric power sector generation will decline by 3 percent in 2020. “Lower production reflects declining demand for coal in the electric power sector, lower demand for U.S. exports, and a number of coal mines that have been idled for extended periods as a result of COVID-19,” the EIA stated in the report.

EIA forecasts that total coal consumption will decrease by 19 percent in 2020, driven primarily by electric power sector demand, which will fall by about 20 percent in 2020.

Consol recently restarted operations at its Bailey Mine in Washington County after it was closed for two weeks due to several employees testing positive for COVID-19. But it then announced that it was idling the adjacent Enlow Fork mine because of low demand. Contura Energy in early April said it would idle most of its mines, although one in Greene County is still operating.

“For utilities with a mix of coal- and gas-fired generation, it makes sense in the current environment to run gas plants as much as possible to take advantage of low fuel prices, while sharply cutting back on more expensive coal generation,” the Institute for Energy Economics and Financial Analysis reported.

The EIA also reported that natural gas, wind and solar accounted for almost all of the new electric generating capacity created in 2019, while coal-fired power plants continue to be retired.

Longview plans to transfer ownership of the plant to its senior secured creditors, who will provide additional financing for the facility. “We are not planning any changes to our staffing and expect to pay vendors in the ordinary course during the Chapter 11 process, and we will continue to operate as productively as ever,” said CEO Jeffery Keffer in the news release. “Further, we do not anticipate any change in the development of the Longview natural gas and solar projects.”