The Plant Daniel scrubber project team is continuing engineering design and is in the early stages of construction, with the primary construction activities at the Mississippi site for this year including site preparation, relocations, and the installation of foundations required to support the Unit 1 and 2 absorber vessels and new stack.
By year end 2012, the Plant Daniel scrubber project will be approximately 22% complete. During 2013, completion of the scrubber site development and installation of foundations are projected to take place. Fabrication of the stack liner and construction of the stack shell and absorber vessels will begin during 2013. Projected 2013 capital expenditures for Gulf’s 50% ownership portion of the Daniel scrubber project are $111m, said James Vick, employed by Gulf Power as the Director of Environmental Affairs.
Testimony from Vick was included in an Aug. 28 filing by Gulf Power with the Florida Public Service Commission of projected environmental costs for 2013. The filing is part of an annual environmental cost review case for this Southern Co. (NYSE: SO) subsidiary. Gulf Power co-owns the Daniel coal plant in Mississippi with another Southern unit, Mississippi Power.
Daniel Units 1-2 each have a nameplate rating of 548.25 MW. Both coal-fired units were affected under the EPA’s Acid Rain Program and have operated on low-sulfur coals since the 1990s to lower SO2 emissions.
Gulf Power is currently evaluating potential options to comply with the Mercury Air Toxics Standards (MATS) rule, Vick noted. Compliance with this rule is likely to require substantial capital expenditures and compliance costs at the company’s facilities. These costs may arise from unit retirements, installation of additional emission controls, changing fuel sources for certain existing units, the addition of new generating resources, and/or upgrades to the transmission system. The MATS rule also requires installation of additional continuous emission monitors and/or additional emissions testing. Once the Gulf Power determines the most cost-effective compliance options, Gulf will submit revisions to the Environmental Compliance Program for the commission’s review, Vick wrote.
In the Aug. 28 filing were also updates on various emissions control projects and costs.
For example, the company noted that the Plant Crist precipitator projects are necessary to improve particulate removal capabilities as a result of burning low-sulfur coal. The larger, more efficient precipitators with increased collection areas improve particulate collection efficiency. The upgraded Crist Unit 7 precipitator was placed in service during 2004 as part of an agreement with the state. The Plant Crist Unit 6 precipitator upgrade was placed in service in April.
The Florida Department of Environmental Protection (FDEP) and Gulf Power entered into an agreement in 2002 to support local efforts to maintain compliance with the 8-hour ozone ambient air quality standards. This agreement included a requirement for Gulf to install Selective Catalytic Reduction (SCR) controls on Crist Unit 7, relocate the Crist Unit 7 precipitator, and install a NOx reduction technology on Plant Crist Unit 6, and Units 4 and 5 if necessary, to meet the NOx standard specified in the agreement. The new Crist Unit 7 precipitator and SCR were placed in service during 2004 and 2005, respectively. The Crist Unit 6 Selective Non-Catalytic Reduction (SNCR)/low NOx burners with Over-Fired Air (OFA) technologies were placed in service during November 2005. The Crist Unit 4 and Unit 5 SNCRs were placed in service during April 2006. The Crist Unit 6 SNCR was retired during the spring of this year when the Crist Unit 6 SCR was placed in-service.
Gulf plans to replace one layer of the Plant Crist Unit 7 SCR catalyst during 2012. Gulf plans to add an additional catalyst layer to the Plant Crist Unit 6 SCR during 2014 and a new catalyst layer will be purchased in late 2013 for installation during the spring of 2014 outage.
Southern’s Aug. 6 Form 10-Q filing at the SEC said about the Daniel project: “On February 14, 2012, Mississippi Power submitted its 2012 ECO Plan filing, which proposed a 0.3% increase in annual revenues for Mississippi Power. In compliance with the [certificate of public convenience and necessity] to construct a flue gas desulfurization system (scrubber) on Plant Daniel Units 1 and 2, Mississippi Power revised the 2012 ECO Plan filing to exclude scrubber expenditures from rate base, which resulted in a 0.16% decrease in annual revenues. On June 22, 2012, the 2012 ECO Plan filing, including the proposed rate decrease, was approved by the Mississippi PSC, effective on June 29, 2012.”
On April 3, the Mississippi PSC approved Mississippi Power’s request for a CPCN to construct a scrubber on Plant Daniel Units 1 and 2. On May 3, the Sierra Club filed a notice of appeal of the order with the Chancery Court of Harrison County, Mississippi, the Form 10-Q noted.
These Daniel units are jointly owned by Mississippi Power and Gulf Power, with 50% ownership each. The estimated total cost of the project is about $660m. The project is scheduled for completion in December 2015. As of June 30, total project expenditures were $82m.