Dayton seeks Q4 spot coal for Stuart and Killen, plans Hutchings deactivations

Dayton Power and Light (DP&L) said Aug. 31 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 is seeking proposals for coal delivery of up to 400,000 tons, with delivery beginning October 2012 and running through December 2012. Proposals with quantities less than 400,000 tons will be considered. DP&L said it is interested in offers for all types of coal, including offers that represent NYMEX/OTC contract quality specs and shipping locations.

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

Prices quoted should be inclusive of any and all costs, including but not limited to taxes, fees, insurance requirements, barge fleeting and switching charges, harbor costs, port costs, third party costs, etc. which are the responsibility of the bidder and are to be priced FOB railcar or barge. The barges need to be free of all costs to DP&L’s barge transportation contractor, and any and all additional costs must be included in the quoted price of the coal. The price should include all costs up to the point the DP&L’s transportation contractor takes possession and control of the coal and/or railcars. DP&L requests pricing for volume flexibility of 10%-25% for the term offered. In addition to a Btu adjustment, DP&L requests an SO2 penalty. DP&L will not accept an SO2 premium payment structure.

All proposals submitted in response to the RFP must be received by DP&L no later than 5 p.m. Eastern on Sept. 10. Proposals can be submitted by email to DPLCoalRFP@dplinc.com or mailed to Fuel Procurement, Dayton Power and Light, 1065 Woodman Dr., Dayton, OH 45432. Suppliers interested in submitting a proposal may submit questions via email to DPLCoalRFP@dplinc.com.

DP&L on June 6 had issued an RFP for up to 400,000 tons of third-quarter spot coal for these same plants.

Scrubbed plants burn mostly higher sulfur coal

DP&L 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, EVA noted.

Prior to the retrofitting of the scrubbers, Stuart burned low-sulfur coal in order to meet its 3.16 lbs/MMBtu of SO2 limit. 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 reported.

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 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.

Dayton seeks deactivation of three Hutchings units

O H Hutchings Units 1, 2 and 4 appear on a PJM list, updated as of Aug. 27, of planned power plant deactivations in the PJM region. Hutchings Unit 1 (53 MW) and Unit 2 (50 MW) are due for deactivation on June 1, 2015, while Unit 4 (62 MW) is due for deactivation on June 1, 2013. PJM said it found no grid reliability problems due to these shutdowns. Dayton made the deactivation request for Units 1 and 2 in May of this year, and the request for Unit 4 in June.

“Hutchings has now burned less than 100,000 tons per year in the last three years,” said the EVA audit, written before the deactivation requests were made. “All of the coal burned by Hutchings is low sulfur Central Appalachia coal delivered by rail. DP&L is considering several options for Hutchings including retirement and the conversion of two or more of the units to natural gas. An existing natural gas pipeline has sufficient capacity for two units.” The audit showed Hutchings as a six-unit plant. DP&L operates Hutchings as a seasonal plant running more during peak winter and summer months.

DP&L, a regulated electric utility, provides service to over 500,000 retail customers in West Central Ohio. Parent 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.