Duke Energy Indiana drops refined coal projects at two plants

Duke Energy Indiana told the Indiana Utility Regulatory Commission April 19 that testing of refined coal with chemical additives to reduce emissions at the Cayuga and Gibson power plants didn’t work effectively enough, so it is withdrawing its September 2011 application for approval of those projects.

“Duke Energy Indiana has conducted testing at the Cayuga and Gibson generating stations to determine the effectiveness of the refined coal process,” the utility said in a brief filing. “After analyzing the testing results, it was determined that the results did not support moving forward with the refined coal project at either generating station.”

Duke Energy Indiana, a unit of Duke Energy (NYSE: DUK), didn’t elaborate on why the projects didn’t work.

Barry Blackwell, employed by Duke Energy Business Services LLC, an affiliate of Duke Energy Indiana, as Director, Rates, said in September 2011 opening testimony that the plan was for Duke Energy Indiana to sell regular coal out of plant inventory to Cottbus Associates LLC and Marquis Industrial Co. LLC, both subsidiaries of Coal Emissions Reduction Technologies LLC. The coal would be sold at a price equal to Duke Energy Indiana’s weighted average cost of inventory (WACI). Duke Energy Indiana would then have purchased refined coal from CERT at a price equal to Duke Energy Indiana’s WACI plus an emissions premium adder.

Steven Meehan, employed by Duke Energy Business Services as Senior Engineer, Program Engineering–Midwest Region, said in companion September 2011 testimony: “CERT is, as its name implies, an entity that has for a number of years produced Refined Coal in order to reduce emissions and take advantage of certain income tax credits. CERT has produced Refined Coal at fifteen installations at coal mines in Alabama. They are now transferring these operations from relatively small coal mines to large electric generating stations operated by utilities.”

CERT holds a number of franchise licenses for the proprietary Chem-Mod process, which has been used to reduce NOx and mercury emissions from coal-fired utility boilers. At least three other entities hold similar rights to the chemical technology, Meehan noted. However those other entities use more intrusive and capital-intensive application methods to produce the same Refined Coal result, he added. The utility’s Cayuga and Gibson plants will be the first to utilize Refined Coal produced entirely from Illinois Basin coal feedstock, Meehan noted.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.