Dayton seeks third quarter coal, and maybe some fourth quarter

Dayton Power and Light (DP&L) said June 6 that it has issued a request for proposals (RFP) for coal for use at its two Ohio River power plants in Aberdeen and Wrightsville, Ohio.

DP&L wants proposals for quantities up to 400,000 tons, with delivery in the third quarter of this year. Proposals with alternative quantities will be considered and DP&L is interested in offers for all types of coal.

DP&L receives coal via barge at the two stations: J.M. Stuart, located near Aberdeen, Ohio, at Ohio River milepost 404.5; and Killen, located near Wrightsville, Ohio, at Ohio River milepost 389.6. DP&L requests proposals for both stations, FOB Barge and/or FOB Railcar, for delivery in the third quarter.

DP&L said it will also consider offers for the fourth quarter of 2012. Those offers must be provided separately from third quarter submissions and should be clearly marked accordingly.

DP&L is interested in offers of all types of coals that the respondent may have available, including offers that represent NYMEX/OTC contract quality specifications and shipping locations. DP&L requests pricing for volume flexibility of 10%-25% for the term offered.

All proposals submitted in response to this RFP must be received by DP&L no later than 5 p.m. Eastern on June 11.

DP&L, despite some overall high costs for coal, was able to use in 2011 a lot of relatively cheap high-sulfur coal at its scrubbed Killen and Stuart power plants, said an audit of DP&L’s fuel procurement. The audit, written by consultant Energy Ventures Analysis, was filed April 27 at the Public Utilities Commission of Ohio, which had commissioned the audit as part of an annual fuel cost review.

In 2011, DP&L purchased 7.5 million tons of coal at an average delivered price of $60.51 per ton or $2.61 per MMBtu. Out of that coal, 9.6% was purchased on a spot basis. All of the coal purchased for the lightly-used O H Hutchings plant was classified as spot. The remaining spot coal was mostly non-Central Appalachia NYMEX coal purchased for Stuart. The average delivered price for coal at Killen was below the average delivered price for coal purchased for Stuart and Hutchings due to the ability to use a “full diet” of high-sulfur coal, the audit noted.

Stuart consists of four units with a total capacity of 2,308 MW. Retrofits of flue gas desulfurization on all four units were completed in 2008. All coal to this station is delivered by barge. Generation in 2011 recovered only slightly from the low levels experienced in 2010. This is DP&L’s largest station, consistently burning more than 6 million tons per year.

Prior to the retrofitting of the scrubbers, Stuart burned low-sulfur coal in order to meet its 3.16 lbs/MMBtu of SO2 limit under the Ohio State Implementation Plan. The coal originated primarily in Central Appalachia. The retrofit of the scrubbers has allowed higher sulfur coal. The scrubbers are designed for coals with an SO2 content up to 7.22 lbs/MMBtu. However, given the design of the boilers, DP&L did not assume a complete switch to higher sulfur coals because of concerns over slagging and fouling with that new coal, EVA noted.

Killen consists of one 600-MW, coal-fired unit. The unit was subject to the original New Source Performance Standards of 1.2 lbs/MMBtu of SO2, which the utility chose to comply with through the use of low-sulfur compliance coal. A scrubber was retrofitted on Killen in 2007. All of the coal consumed by Killen is delivered by barge. In three of the last five years, this plant operated at plus 75% capacity factors. Coal burn is typically about 1.8 million tons per year. Because of its ability to burn 100% high-sulfur coal, Killen has had lower fuel costs than Stuart and has been operating at higher capacity factors despite a higher heat rate, EVA noted. DP&L is in a testing mode at Killen to explore expanded coal specs, the audit added.

DP&L is the principal subsidiary of DPL Inc., which, through its subsidiaries, owns and operates about 3,800 MW of generation capacity, of which 2,800 MW are coal-fired units and 1,000 MW are natural gas and diesel peaking units. DPL Inc. was acquired by AES Corp. (NYSE: AES) in 2011.

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.