The William H. Zimmer coal-fired power plant in Moscow will close at the end of May 2022, plant owner Vistra Corp. recently announced.

The news was shared in a July 19 press release from Vistra.

In September 2020, Vistra announced that it would close the Zimmer power plant by “year-end 2027 or sooner should economic or other conditions dictate.”

Now, Vistra said it is accelerating the closure of Zimmer as the company continues its transition away from coal.

Vistra plans to retire the site on May 31, 2022.

Zimmer Power Plant, which opened in 1991, currently has about approximately 150 employees. The plant is a single-unit site with a capacity of 1,300 megawatts.

Zimmer says it will evaluate the site for potential investments in renewables or grid-scale battery storage, utilizing existing infrastructure; Vistra is doing this work at its plant sites across the country.

The press release states, “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.”

Chief executive officer of Vistra, Curt Morgan, is quoted as saying that the Zimmer plant has recently struggled economically because if its configuration, costs and performance.

“The PJM capacity revenues are critical to Zimmer, and unfortunately, without them, the plant simply doesn’t make money,” he said, adding, “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.”

While news of the accelerated closure is making headlines, the assessed value of coal-fired power plants like Zimmer has been in a steady decline.

This follows a national trend of declining values of coal-fired power plants; many states are switching to natural gas, which is more abundant and cheaper to use, and renewable, less polluting forms of energy such as solar and wind.

On July 14, the U.S. Energy Information Administration reported that in 2020, U.S. coal production fell to its lowest level since 1965.

The agency’s energy analysis showed that U.S. coal production totaled 535 million short tons in 2020, a 24 percent decrease from the 706 MMst mined in 2019 and the lowest level of coal production in the United States in any year since 1965.

“The decline of U.S. coal production in 2020 was largely the result of less demand for coal internationally and less U.S. electric power sector demand for coal. Lower natural gas prices made coal less competitive for power generation,” reads the analysis. “U.S. coal-fired generation fell 20 percent from 2019. Natural gas prices started 2020 relatively low because mild winter weather led to less natural gas demand for space heating, and prices remained low as the economic effects of the COVID-19 pandemic reduced both natural gas production and consumption.”

It adds, “U.S. coal exports were 26 percent lower in 2020 than they were in 2019. The COVID-19 pandemic slowed global demand for coal, and some U.S. coal mines were idled for extended periods to slow the spread of the virus among workers. Coal exports decreased significantly in April 2020 as the United States and countries around the world responded to the pandemic.”

In its most recent press release from Vistra, the company reports that May’s PJM capacity auction for 2022-23 cleared much lower than expected – nearly 50 percent 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 said it will support its workers during this period.

“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. 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,” reads Vistra’s announcement

Now, local governments and school districts affected by the devaluations, and the upcoming closure, are tasked with budgeting for this change.

Moscow Village Administrator Andrew Gephart said in an email interview that because Vistra had already announced a few months back they were going to close in the next three to five years, the latest news was not a surprise, but he noted that the reality “still stings and a bit sooner than expected.”

He added, “Certainly the village of Moscow will take another hit from a tax revenue side and any workers from Moscow will obviously be affected …. We have already implemented a sewer service/trash collection fee which will go into effect in August. We are looking at other cost saving measures as well for the village.”

Monroe Township Fiscal Officer Candace Forder said that she’s sad to hear about the closure, as the power plant has been a part of the community for a long time.

She added that any loss of revenue is not good for a Township.

“We have already cut our employees’ insurance in preparation for the loss of income. We run a tight budget, and any loss hurts,” she explained.

To make up for the lost revenue, Forder said that the township will make cuts.

“That will be the only choice we will have and continue trying to get new business in our township,” she said.

Grant Career Center Superintendent Michael Parry said in an email interview that the closure of the Zimmer plant will have challenging revenue implications for the school.

He added that the school administration had been planning for the shuttering of the plant during the 2025-27 timeframe as announced last fall, and that the new announcement is very unfortunate for the community and will result in the loss of revenues faster than anticipated.

Parry explained that taxes from the Zimmer plant bring in a little less than $500,000 annually to the Career Center, which Parry explained makes up 8 percent of the school district’s General Fund Revenue.

“While a new funding model has been recently adopted, the loss of Zimmer revenue is significant and will not be made up by the new funding model,” he said, adding, “We will be updating our 5-year forecast and revising our strategic priorities as a result of this unfortunate announcement.”

New Richmond Exempted Village School District Superintendent Tracey Miller has previously explained that the school district receives $2.5 million in tax revenues from the Zimmer plant, and that the loss of the source of revenue would have a significant impact on the school district’s budget.

In a school newsletter set to go out following Vistra’s recent announcement, Miller and school board members were reported as saying that the news was definitely a shock, and that just three months ago in a meeting, the company that owns the power station announced that it was committed to staying open until 2027.

“Our fine Treasurer will assess the impact for us, and we will react accordingly,” Miller was quoted as saying. “We have made tremendous strides and headway for some years here on our financial picture with the support of our community, and our administration and staff. We have shouldered the load, and that’s what we are going to continue to do.

“I think it would be good to see what the numbers look like, and go from there. We will survey our community and ask them to identify what’s important, what’s valued, and what’s prioritized. We will weigh the opinions of the Board Members and make decisions based on data.”