MidAmerican Energy is installing dry scrubbers and baghouses on George Neal Units 3-4, plus it is adding other emissions control projects to the queue as it tries to comply with a series of new U.S. Environmental Protection Agency air rules.
MidAmerican on April 2 filed an updated air plan with the Iowa Utilities Board. Spencer Moore, Project Director-Supply for MidAmerican, outlined the status of the current plan and a prior such plan approved by the board in 2010. MidAmerican is controlled by Berkshire Hathaway (NYSE: BRK.A and BRK.B).
“MidAmerican’s approved 2010 Plan outlined two new projects; one dry scrubber and baghouse project at George Neal Energy Center Unit 3 (‘Neal Unit 3’); and one dry scrubber and baghouse project at George Neal Energy Center Unit 4 (‘Neal Unit 4’),” Moore wrote. “Construction of both projects at the Neal Energy Center started in 2011. The capital investment in the dry scrubber and baghouse projects at Louisa and Walter Scott Jr. Energy Center Unit 3 (‘WSEC 3’) was completed in 2011. The Louisa and WSEC 3 projects were identified in the 2005 Plan Update and 2006 Plan Update, respectively.”
The dry scrubber and baghouse projects at WSEC 3 and Louisa extended past the originally planned 2010 timeframe and into 2011 due to spare parts procurement and engineering expenses associated with spare parts manufacturing. Capital investments in those projects are now complete. SO2 emissions at both facilities have acceptable reductions from a baseline of 0.68 lb/mmBtu, Moore noted.
MidAmerican is now pursuing the installation of activated carbon injection (ACI) and turbine efficiency upgrades at Neal Unit 3 and Neal Unit 4 during the 2012-2014 compliance plan period. Also, MidAmerican will pursue installation of ACI projects at the WSEC 3 and Louisa facilities during the 2012-2014 plan period.
As a result of the EPA’s Mercury and Air Toxics Standards (MATS), Clean Air Interstate Rule (CAIR), Cross-State Air Pollution Rule (CSAPR) and Greenhouse Gas Tailoring Rule (GHG Tailoring), MidAmerican said it continues to review its fleet-wide reasonable cost strategy to comply with the required lower emission limits for SO2, NOx, greenhouse gases (GHG) and mercury. The proposed projects will allow Neal Unit 3, Neal Unit 4, WSEC 3, and Louisa to comply with these lower emission limits by April 16, 2015.
Iowa Department of Natural Resources (IDNR) construction permits associated with the dry scrubber and baghouse projects for Neal Unit 3 and Neal Unit 4 each contain requirements to install more efficient steam turbines or steam turbine sections to improve efficiency and comply with CO2 and CO2 equivalent emissions (CO2e) limits. The construction permits also require the installation of ACI systems to control mercury emissions at Neal Unit 3 and Neal Unit 4.
MidAmerican has not yet applied for construction permits for the planned installation of ACI systems at Louisa or WSEC 3, but anticipates that these applications will be filed with the IDNR at a point that is redacted from the public version of Moore’s testimony.
The MATS rule was recently promulgated by EPA and has a compliance date of April 16, 2015. For MidAmerican to comply with the MATS rule, installation of ACI systems at Louisa and WSEC 3 will be required, Moore wrote.
The budgetary basis of the turbine upgrade project at Neal Unit 4 is based largely on the contract price for equipment entered into with the low-pressure turbine (LPT) supplier. MidAmerican entered into a purchase agreement for the LPT equipment in February. MidAmerican is currently in the procurement stage for the turbine efficiency upgrades required at Neal Unit 3 and a procurement specification was issued in February.
MidAmerican revives plans for SNCR installations
As for a NOx-control plan from 2009, MidAmerican said it received competitive proposals from four companies; Aptech, Combustion Component Associates, Fuel Tech and Nalco Mobotec. The proposals centered around selective non-catalytic reduction (SNCR) technology, which can generally provide significant NOx emission reduction benefits, depending on the technology, boiler design, reagent type and quantity, and baseline NOx emission levels.
MidAmerican said it did not pursue installation of SNCR systems in the 2010 Plan because NOx allowance prices were less than installed costs for SNCR systems. However, the implementation of the more restrictive requirements under CSAPR has limited the company’s ability to utilize purchased allowances as a compliance strategy. Also, the construction permits for Neal Unit 3 and Neal Unit 4 require SNCR systems to be installed to meet NOx emissions limits. So MidAmerican is planning to issue an updated specification for SNCR equipment in the first half of 2012.
It is anticipated that Neal Unit 3 and Neal Unit 4 will have no reduced generating capacity as a result of the four major projects (dry scrubber and baghouse, SNCR, ACI and turbine upgrades) associated with compliance with the CSAPR, MATS, and CAIR rules. The turbine efficiency upgrade projects at each facility are planned to offset the additional auxiliary power consumption from the dry scrubber and baghouse projects. The SNCR and ACI projects are expected to use small amounts of auxiliary power and will not have a significant impact of overall station generating capacity or station heat rate.
Each of the air projects is scheduled for installation within the respective units’ planned maintenance outages. Therefore the construction of the projects will not reduce the electrical generation of the units. Outages will not be required at WSEC 3 or Louisa to install the ACI systems as provisions are available to install the ACI systems at each facility while the units remain online.
MidAmerican’s Feb. 27 annual Form 10-K report gives these total net power rating for the units mentioned here, and the net power of those co-owned units held by MidAmerican.
- Neal Unit 3, 522 MW total, 376 MW owned
- Neal Unit 4, 645 MW total, 262 MW owned
- Scott Unit 3, 709 MW total, 561 MW owned
- Louisa, 750 MW total, 660 MW owned
“All of the coal-fueled generating facilities operated by MidAmerican Energy are fueled by low-sulfur, western coal from the Powder River Basin in northeast Wyoming,” the Form 10-K noted. “MidAmerican Energy’s coal supply portfolio includes multiple suppliers and mines under short-term and multi-year agreements of varying terms and quantities. MidAmerican Energy’s coal supply portfolio has all of its expected 2012 requirements under fixed-price contracts. MidAmerican Energy regularly monitors the western coal market for opportunities to enhance its coal supply portfolio. During the year ended December 31, 2011, MidAmerican Energy-owned generating facilities held sufficient allowances for sulfur dioxide and nitrogen oxides emissions to comply with the EPA Title IV and Clean Air Interstate Rule (‘CAIR’) or CSAPR requirements.”