On April 3, the Board of Directors of Southern Electric Generating Co. (SEGCO) approved adding natural gas as the primary fuel for the coal-fired Gaston power plant in Alabama, and also approved the construction of the pipeline lateral needed to supply gas to the units.
Georgia Power, another unit of Southern Co. (NYSE: SO), made that point in an update of its integrated resource plan (IRP) filed April 17 at the Georgia Public Service Commission.
“The SEGCO decisions were necessary to ensure adequate time to procure easements and construct the natural gas lateral required to serve Plant Gaston in order to maintain its availability for retail customers in 2015, as was assumed in the Updated IRP,” Georgia Power wrote. “The SEGCO decisions are also consistent with the findings of the economic analysis provided to the commission in the Updated IRP, which demonstrated that the continued operation of Plant Gaston with natural gas capabilities is beneficial to customers.”
Georgia Power also filed with the commission on April 17 its first monthly report on the initial baghouse emissions controls work being performed at the coal-fired Bowen Units 1-4, Wansley Units 1-2 and Hammond Units 1-4 to comply with the U.S. Environmental Protection Agency’s final Mercury and Air Toxics Standards (MATS) rule. That filing was heavily redacted, but did note that no contract exceeding $10m for this project has been awarded yet. It is the company’s intent to submit this report monthly until the filing of the company’s 2013 IRP.
The commission approved the company’s Updated IRP on Dec. 29, 2011. The Updated IRP showed that it was economic to operate Gaston on natural gas as compared to the replacement cost of a combustion turbine. Gaston, which totals about 1,020 MW of capacity, currently operates on coal and is wholly owned and operated by SEGCO. SEGCO is jointly owned by Georgia Power and Alabama Power, and the majority of the output of the plant is utilized to serve both companies’ retail customers.
In addition to the coal-to-gas conversion at Gaston, as an alternative to the option of utilizing oil backup for Gaston as was evaluated in the Updated IRP, it was also determined by SEGCO that the more cost effective choice would be to continue to utilize coal as a limited fuel source and as fuel backup. This alternative will enhance fuel diversity at Gaston and further improves its economics while achieving compliance with the EPA’s final MATS rule, Georgia Power noted.
The Southern Co. Services website shows Gaston having a typical yearly need of 4.5 million tons of coal, with that coal having specs including 11,800 Btu/lb and 3.8 lbs/MMBtu of SO2. Southern Co. Services buys coal for various Southern Co. subsidiaries, including Georgia Power and Alabama Power.
U.S. Energy Information Administration data shows Gaston in January getting coal from entirely Alabama mines, with suppliers being Taft Coal Sales, Alabama Coal, Twin Pines Coal and Walter Energy (NYSE: WLT). The Walter Energy coal is from the newly-acquired North River longwall mine. Incidentally, North River is on its last couple of years of coal reserves and Walter Energy has said it plans to use the mine’s workforce to man a new metallurgical coal mine in the works for Alabama.