Seminole Electric Cooperative is backing out high-sulfur petroleum coke from the fuel mix at its coal-fired Seminole power plant and moving to upgrade the existing SO2 scrubbers on the two Seminole units.
In a June 29 letter to the Florida Department of Environmental Protection, Seminole Electric noted that on May 30 it had filed with the agency a “reasonable progress” analysis that said it would seek a permit change to remove petcoke from the fuel mix at Seminole Units 1-2. That is to ease SO2 loading to the flue gas desulfurization (FGD) systems to lower SO2 emissions overall.
Seminole Electric also committed to upgrading the FGDs to reach a minimum SO2 removal efficiency of 95%, or no more than 0.25 lbs/mmBtu of SO2 emissions on a 30-day rolling average. The FGD upgrades would be done by March 1, 2016. Seminole Electric said that since these petcoke abandonment and FGD upgrade commitments are to help it and the DEP attain reasonable progress goals under the DEP’s in-the-works regional haze State Implementation Plan (SIP), these changes should not go into force until that part of the SIP is approved by the U.S. Environmental Protection Agency.
Alliance Coal supplying most of the coal to Seminole
Most of that coal for the Seminole plant will come from one supplier. Alliance Resource Partners LP (NASDAQ: ARLP) on July 5 filed with the SEC a heavily-redacted coal contract “confirmation” that covers potentially the full requirements for the plant for the six-year period of January 2013-December 2018. The confirmation said: “Except as otherwise provided in Section 8.6, Buyer shall not purchase coal from other sources in any Contract Year unless Buyer has committed to purchase at least 4,000,000 tons of Coal from Seller in such Contract Year.”
Since the confirmation, signed by Alliance’s Alliance Coal LLC subsidiary, said that the full need at the Seminole plant is about 4 million tons in any given year, and the power generator has to potentially buy at least 4 million yearly tons from Alliance, this looks to be basically a full requirements contract, which is an unusual agreement in the modern coal business outside of minemouth power plants. The sources for this high-sulfur coal include Alliance’s Pattiki mine in Illinois and the Dotiki, Warrior and Elk Creek mining operations in West Kentucky.
This deal doesn’t apparently lose much business for other coal suppliers. U.S. Energy Information Administration data shows that all the coal going to Seminole in January was from Alliance mines in West Kentucky and Illinois.
“Consisting of two 650 megawatt coal-fired generating units, Seminole Generating Station began commercial operation in 1984,” said the Seminole Electric website. A brochure on the website gives the fully-scrubbed plant’s washed coal specs as 8.5% ash, 3% sulfur, delivered primarily from mines in western Kentucky and southern Illinois at 11,700 Btu/lb. “The Seminole Generating Station is permitted to burn up to 30% of its fuel as petroleum coke (petcoke),” the brochure added. “Actual amounts burned depend on the price and availability of petcoke, and plant conditions.”