Tampa Electric has problems selling Big Bend scrubber waste

Tampa Electric told the Florida Public Service Commission on June 25 that its efforts to market SO2 scrubber byproduct gypsum from its Big Bend coal plant have met with mixed success and it still may need commission approval to build a scrubber waste landfill.

In August 2011, this TECO Energy (NYSE: TE) unit filed its petition in this docket proposing what represented its considered best judgment on how to deal with certain “pressing realities.” That included continued production of over 700,000 tons of gypsum per year from the operation of its scrubbers at Big Bend Units 1-4, an increasing shortage of working storage space on site at Big Bend for that gypsum and the compounding effect of a housing market decline. Gypsum from scrubbers is often sold into the wallboard market, so the 2008 plunge in housing construction cut into the gypsum market.

This matter came before the commission at March and May agenda conferences, during which the commission expressed concern about the cost of the proposed new gypsum storage handling facility. At the conclusion of the May 8 agenda conference discussion, the commission suggested that Tampa Electric inquire of potential third party off-takers as to their potential need or willingness to accept additional commercial grade gypsum by-product. Tampa Electric agreed to a deferral of its proposed project and set about to canvass potential additional off-takers as suggested by the commission.

Tampa Electric said in a June 25 interim report that it has received three invitations to negotiate on various amounts of gypsum that will require further evaluations to determine if they are viable alternatives. Tampa Electric has requested deferral of this matter until the commission’s Aug. 14 agenda conference, citing the need for additional time to pursue due diligence with respect to the three parties. Tampa Electric said it continues to pursue potential gypsum off-takers in Latin America and is also considering options for reducing the cost of the disposal project.

Since the August 2011 petition filing, there have been changes in the circumstances involving the operation of the gypsum storage facility. The production of gypsum has been within Tampa Electric’s expected range. However, the consumption by the company’s primary off-taker has been less than expected. National Gypsum is consuming gypsum at a rate below the annual minimum quantity and it is unlikely that National Gypsum will meet the minimum amount in 2012 and subsequent years until 2017, the utility noted. As a result, the gypsum inventory has grown fast. Also, the company has received complaints regarding dusting from residents immediately south of the storage pile.

Tampa Electric said it is in discussions with a Florida landfill to utilize up to about 350,000 tons of lesser quality gypsum by-product as “valley fill,” to fill in gaps created during the deposition of bulk waste materials as part of the process of closing a lined area within the landfill. This reuse of the lesser quality gypsum has enabled the landfill operator to offer Tampa Electric a reduced tipping fee of $18/ton to accept this type of gypsum for a limited time. With transportation included, Tampa Electric’s total cost is about $26/ton to place this lesser quality gypsum with the landfill operator.

This opportunity is beneficial to Tampa Electric and its customers in several important ways, including that at this time the lesser quality gypsum cannot be sold to wallboard makers, cement manufacturers or agricultural interests because it does not meet quality specs required for those uses, the utility 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.