Tampa Electric officials argued at a March 13 Florida Public Service Commission for approval to build and pass along to ratepayers the cost of a new gypsum disposal facility that it calls critical to the future of the coal-fired Big Bend power plant.
Tampa, a unit of TECO Energy (NYSE:TE), wants to pass along the costs of this waste facility, with a commission approval, through its environmental cost recovery clause mechanism. At a March 13 hearing on the application, Mark Hornick, Director of Planning, Engineering and Construction for Tampa Electric, pointed out that gypsum is a by-product of the Big Bend plant’s SO2 scrubbers, which were added in phases at the plant to respond to ever-tighter air emissions regulations. Gypsum can be sold into the wallboard manufacturing market, though that market is not consistently there.
Since 2000, Tampa has been using the same storage area that was originally sized for one unit’s production and now currently has four units’ production, Hornick noted. “We were able to manage that situation over the years with kind of ebbs and flows in the amount of working storage that we’ve had,” he added. “As volatility has increased in the demand of gypsum, that inventory has slowly grown, and in recent years it’s grown significantly. We need an additional storage area in order to manage the volume, manage the temporary imbalances between supply and demand, and be able to just manage the logistics out there at the site.”
Tampa representative James Beasley said this project is significantly more cost-effective than any of the alternatives that the company has been able to evaluate for the disposal of this by-product. “The company has been recognized by your staff in a recent report for being able to sell approximately 86% of the gypsum by-product that we have been producing,” Beasley added. “It is an essential by-product. You can’t run these units without generating this gypsum by-product.”
Hornick said this new disposal site would last about five years at the current rate of supply and demand for gypsum, which is currently at a low ebb. “The demand is low because the current demand for wallboard, which is our primary market off-taker, is down,” he added. “We expect and we’re pursuing additional markets, so this should get us through this current downturn and then allow us to manage this larger volume of inventory really for the next 20 to 30 years.”
The commission has deferred action on the landfill application until an April 10 commission conference while instructing commission staff to bring additional information to that proceeding.
TECO Energy’s Feb. 24 Form 10-K annual report described the phased addition of scrubbers at the four-unit 1,582-MW Big Bend plant. “Reductions in SO2 emissions were accomplished through the installation of scrubber systems on Big Bend Units 1 and 2 in 1999. Big Bend Unit 4 was originally constructed with a scrubber. The Big Bend Unit 4 scrubber system was modified in 1994 to allow it to scrub emissions from Big Bend Unit 3 as well. Currently the scrubbers at Big Bend Power Station are capable of removing more than 95% of the SO2 emissions from the flue gas streams.”
The fully-scrubbed Big Bend plant burns primarily high-sulfur coal from the Illinois Basin from various suppliers.