Expect breakdowns on Black Dog’s road to 2015 coal retirement

Expect the aging coal-fired units of the Black Dog power plant of Northern States Power-Minnesota (NSPM) to be hit with mounting equipment failures as they head for retirement in 2015 because of reduced upkeep, the company said.

NSPM, a unit of Xcel Energy (NYSE: XEL), made that point in a July 11 filing at the Minnesota Public Utilities Commission as part of an annual cost adjustment case. The filing is a grab-bag of replies to comments made by the Minnesota Department of Commerce, Division of Energy Resources.

One point of information has to do with tube leaks at the Riverside, High Bridge and Black Dog plants. “In 2003, the Company began the planning process to convert the Riverside and High Bridge plants to natural gas-fired plants as part of [the Metro Emissions Reduction Program (MERP)],” the utility wrote. “Prior to conversion, these plants were powered by coal boilers put into service in the mid 1950s and early 1960s. Since the coal boilers were set to be retired as part of MERP, the most economical and prudent operational mode in the preceding years was to run them with minimal maintenance which thus led to an increase in the number of boiler outages and tube leaks at these two plants between 2003 and 2006. The plants were then retired and converted to natural gas in the 2007–2009 time period. Currently, the Black Dog plant is being run in a similar mode since its coal units are to be retired in 2015.”

One key measure of performance is plant availability and, based on industry standards, NSPM said its plants consistently rank in the upper quartile range. “Although not requested by the Department, we believe it is important to consider plant availability factors in conjunction with the Department’s Information Requests,” the utility added. “In particular, we believe plant availability directly reflects the prudency of maintenance performed by the Company. For this reason, we are providing plant availability factors for the King, Sherco and Black Dog plants, as these are three of our major base-load generation plants.” The company said that all three plants are in the 50%-75% quartile for availability, with each well over 80% in the last few years.

“The High Bridge and Riverside plants were converted from coal-fired base load plants to natural gas peaking facilities under the Metro Emissions Reduction Program (MERP) in 2008 and 2009, respectively,” the utility added. “Consequently, their performance is not measured on the basis of plant availability factors. As mid-merit facilities, the performance is measured by availability and start reliability. For Riverside and High Bridge, each metric is currently in the high 90 percent range.”

The Xcel website said Black Dog is a coal- and gas-fired station, on the Minnesota River just south of the Twin Cities. The original Unit 1 boiler/turbine and the Unit 2 boiler, were 1950s era coal units and were replaced recently with a natural gas combined-cycle (Unit 5), which includes a natural gas-fired turbine-generator combined with a heat recovery steam generator. Exhaust heat from Unit 5 powers the Unit 2 steam turbine. The repowering project, completed in summer 2002, boosts output from the two original units by more than 100 MW and results in cleaner power production. Units 3 and 4 are dual-fuel boilers with steam turbines that continue to use coal as the primary fuel. Natural gas is the backup or topping fuel used to obtain maximum generation for both units. Unit 3 has 108 MW of capacity and Unit 4 has 170 MW, the website shows.

Northern States says wind can blow holes in transmission planning

Northern States Power-Minnesota addressed questions related to recent curtailments to wind capacity to ease system congestion. “The increase in wind usage increased the amount of congestion experienced during FYE 2011 and, similarly, the cost to manage that congestion,” the company said. “[O]ne of the biggest categories of increases in congestion costs related to coal generation. A significant factor leading to increase in coal unit congestion costs during the reporting period is transmission outages in the vicinity of the coal plants. During FYE 2011, more transmission outages impacted our congestion costs than in FYE 2010. During the spring of 2011, NSPM experienced an increase of 90 cents per MWh in congestion costs at Sherco facilities at the same time transmission outages occurred. The spring of 2011 accounts for more than 59% of the total increase in congested costs associated with coal plants and this increase corresponds to transmission outages in those areas.”

“Congestion fundamentally is rooted in price separation between electricity suppliers,” the utility said. Fuel price increases affect congestion costs because a $1/MMBtu increase in fuel results in a $10/MWh increase in price at a facility with 10,000 BTU/kWh heat rate and a $12/MWh increase in price at facility with a 12,000 BTU/kWh heat rate. Since the marginal congestion cost is fundamentally derived by underlying differences in energy costs, an increase in cost of fuel would lead to increases in congestion costs. The major fuel cost pressure on congestion costs is the increase in coal prices, with coal from both Illinois and the Powder River coal Basin both experiencing price increases between 20 and 30 cents per mmBtu between FYE 2010 and FYE 2011. “The coal price increase is significant because coal in July 2011 was the marginal fuel 87.9% of the time, which contributed to the increase in congestion costs in FYE 2010 and FYE 2011,” the utility said.

In the Midwest ISO region, the bulk of wind generation is located in the western portion of the system, but the need for wind power is in the eastern part. “The transmission of this generation across the system naturally causes transmission congestion,” the company added. “When this occurs, MISO performs an economic redispatch to relieve the congestion. The costs associated with redispatched generation units are congestion costs, which will vary depending on the cost of the generation MISO redispatches.”

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.