The Dayton Daily News has covered the Dayton Power & Light Co. for decades and was the first local news organization to report the utility’s problems and changes while under the ownership of AES.
The AES Corp., the parent company of Dayton Power & Light, said Thursday that its first-quarter profit fell 76 percent due in part to costs associated with the local utility.
In its filing with the Securities and Exchange Commission, the global energy company also disclosed that it plans to close the O.H. Hutchings Generating Station in Miamisburg along the Great Miami River at the end of the month.
The six coal-fired units at Hutchings provide about 360 megawatts of electricity and the plant has employed 50 in recent years, but workers will not lose their jobs because they will transfer to other positions, the company said. Some are going to other power plants and others are staying in the Dayton area, the company said.
Chris Fine, development director for the city of Miamisburg, said the city planned to reach out to the utility to discuss future prospects for the closed plant. “We’ve spoken to them in the past about the future of the facility,” he said.
As reported last year in the Dayton Daily News, Hutchings faces heavy costs if it were to adapt to newer U.S. Environmental Protection Agency regulations to reduce mercury and other heavy metals in smokestack emissions. Hutchings dates to the late 1940s and is the only DP&L plant that can't meet the new regulations, the utility has said.
At the moment, one of the Hutchings units is out of service with damage to its turbine. DP&L will retire units 1, 2, 3, 5 and 6 by June 2015. AES said that it considered converting the coal-fired units to natural gas, but the “cost of investment exceeded the expected return.”
“DP&L did not lay off any workers at Hutchings Station. Those workers were able to transition to positions they were qualified for at other locations. A small crew and supervisors will remain at Hutchings to ensure its security,” company spokeswoman Emily Gray said.
Many utilities have announced closings of older facilities because it has been cost prohibitive to meet the new standards, which take effect in April 2015,” Gray said.
She added that DPL Inc. has invested approximately $800 million in environmental protection controls in recent years at its Stuart and Killen Stations in southern Ohio, and both plants are expected to meet the new standards.
Gray said that Hutchings has been considered a peaking station for some time, meaning it only operates when there is an extremely high demand for power. Even without Hutchings, DP&L has enough energy capacity to satisfy the needs of all its customers, she added.
DP&L provides electricity to more than 500,000 customers in 24 counties, including Montgomery, Miami, Greene, Clark and Warren counties.
Besides those units, DP&L owns approximately 207 megawatts of coal-fired power at Beckjord Unit 6, which is operated by Duke Energy Ohio. Co-owners of the Beckjord unit have said retire it by June 1, 2015. There are no plans to replace it.
Separately, DP&L said there are no plans to move its headquarters out of Dayton. In a final merger agreement in November 2011, AES agreed to maintain DP&L’s operating headquarters in Dayton for at least five years, Gray said.
In other company news, AES said DP&L’s Electric Security Plan filed with the Public Utilities Commission of Ohio is still pending, but the company expects a decision by PUCO late this quarter or early in the third quarter. The plan would result in an additional $5 charge to ratepayers’ monthly bills, but many would recover the expense with savings. It’s intended to assist the utility in transition to a competitive market for electricity.
The charge is expected to generate $138 million per year for five years from all DP&L customers, AES said.
AES said Thursday its profit fell to $82 million, or 11 cents per share, from $341 million, or 45 cents per share, in the year-ago period. Revenue totaled $4.27 billion versus $4.59 billion in the same period a year ago. The company, however, reaffirmed a 2012-2015 total return target of 6 percent to 8 percent.
AES said that its utilities revenue for the quarter fell $10 million, or 1 percent, compared to the three months last year, because of lower prices of $69 million at DPL Inc.
There was also a decrease of $6 million at DPL Inc. due to the unfavorable impact of adjustments on derivative contracts.
Last year, AES took a $1.8 billion write-down of DPL assets.
AES, of Arlington, Va., is a Fortune 200 company that also owns Indianapolis Power & Light Co. and electric generating and distribution operations around the world.
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