American Electric Power (NYSE: AEP) shut down the Conesville wash plant, located at its Conesville power plant in Ohio, back in December and now has that venerable facility up for sale, said AEP spokesperson Melissa McHenry on April 5.
The wash plant, which had at one time employed 22 workers, had been washing raw coal that AEP bought from coal suppliers in the region, with the washed coal then burned in the power plant. But in recent years the company had been switching more to coal already washed by the coal suppliers and that switch to pre-washed coal is now complete.
The power plant itself has undergone changes in the meantime, which impacts the quality and quantity of coal needed. Units 1 and 2, with 125 MW of capacity each, were shut in 2005. The 165-MW Unit 3 is due to be retired by the end of this year, McHenry noted. The 780-MW Unit 4 in recent years has gotten SO2 scrubber and selective catalytic reduction (SCR) installations. Scrubbers allow a burn of higher sulfur coals. Units 5 and 6, with 800 MW total, have had scrubbers for many years, with plans now in play to install SCR and dry sorbent injection at those two units for further emissions reductions, McHenry said.
U.S. Energy Information Administration data shows that the coal suppliers to the plant in January were the Oxford Mining Co. LLC unit of Oxford Resource Partners (NYSE: OXF) and independent Ohio producer Buckingham Coal.
An audit done last year by consultant Energy Ventures Analysis for the Public Utilities Commission of Ohio provided details about the Conesville wash plant – and urged that AEP shut and/or sell it. The audit was on the fuel buying of AEP’s Ohio Power and Columbus Southern Power subsidiaries.
The wash plant was built in the early 1980s to wash local, high-sulfur, raw coal for Conesville Units 1-4 which at that time were subject to a 5.66 lb/MMBtu SO2 emission limit. The plant has a rated capacity to wash 1,000 raw tons of coal per hour, the audit noted.
The EVA audit indicated that AEP was hesitant about shutting the wash plant due to new U.S. Environmental Protection Agency rules about hazardous air pollutants, which would be reduced by washing coal in the plant. But EVA argued that the depressed use of the plant lately was driving up the cost per-ton for the washed coal since certain fixed plant costs were being spread over fewer tons of output. AEP was also concerned about how to expense the closure costs, the audit said. The audit, filed with the commission in May 2011, suggested that AEP do a study on wash plant closure issues.
A January order from the commission in the fuel case noted that AEP has promised the shutdown study would be ready for this year’s fuel audit.