Coal news and updates

Michigan, Iowa utilities to go forward with coal retirements, conversions to gas

Despite the US Supreme Court's ruling Monday against the Environmental Protection Agency's Mercury and Air Toxics Standards rule, electric power utilities in Michigan and Iowa say they are moving forward with plans to close coal-fired power plants or convert existing coal burners to natural gas over the next several years.

The Supreme Court Monday ruled the EPA erred by refusing to consider cost when deciding to regulate emissions of mercury from the power sector.

The Michigan South Central Power Agency's decision late last week to retire its 55-MW Endicott coal plant at Litchfield in June 2016, has nothing to with MATS, general manager Glen White said in a Monday interview.

Endicott, which went into commercial operation in 1983, is equipped with a scrubber and already complied with MATS, which took effect in mid-April, White said.

"Environmentally, we didn't really have any issues," he said. "We had all the bells and whistles."

What Endicott also has is a profitability problem that no Supreme Court ruling may be capable of solving.

"Natural gas is beating the pants off us right now," White said. "We can't get enough money [from the Midcontinent Independent System Operator] and the heat rate is not high enough."

Gas appears destined to grab a bigger bite of the generation pie in both Michigan and Iowa in coming years regardless of how the contentious MATS issue plays out.

Alliant Energy spokesman Justin Foss Monday said that company has committed to stop burning coal in the 212-MW baseload plant in Burlington, Iowa, by 2021. The company may switch Burlington to gas, although a final decision has not been made.

Recently, Alliant completed the conversion to gas of its 100-MW ML Kapp coal plant in Clinton. Previously, the company's 81-MW Dubuque and 84-MW Sutherland aging coal plants were shifted to gas.

Alliant also is mulling whether to convert its 245-MW Prairie Creek coal plant in Cedar Rapids to gas by 2025.

"Our company has already started implementing a strategic plan to transform our generation fleet to one that is more efficient with lower emissions to comply with a variety of environmental requirements," not only MATS, said Alliant spokesman Scott Reigstad.

As a result, the company expects to continue operating all of its existing air quality control systems.

"This Supreme Court decision has no impact on our company in the short-term," Reigstad said. "We'll now just track EPA's process moving forward as it reconsiders any changes to the rule."

In addition to Prairie Creek, Alliant still owns stakes in the 726-MW Ottumwa and 275-MW Lansing coal plants. There are no current plans to idle or convert either facility.

Alliant is constructing a 650-MW gas plant at Marshalltown that is scheduled to be opened in early 2017.

Ohio-based FirstEnergy, one of the largest electric power utilities in the US, already has deactivated 5,429 MW of coal-fired generation and has no intention of placing any of it back on line, said company spokeswoman Stephanie Walton.

"We will not reopen any plants," she said. "Deactivating power plants is an expensive process, and once they are deactivated it is difficult to restart them."

Michigan South Central Power Agency probably will sign one or more short-term power purchase agreements before Endicott goes down for good next year to help meet some of MSCPA's roughly 120-MW load, White said.

Longer term, the company may look to partner with others to build a new gas-fired combined-cycle plant in Michigan.

Endicott burns about 120,000 st of high-sulfur eastern Ohio coal annually. At one time, the plant consumed twice as much coal.

Alliant's Iowa coal plants mostly burn low-sulfur Powder River Basin coal.

source: http://www.platts.com