IPL to extend nuclear contract, develop 600-MW gas plant

Alliant Energy (NYSE: LNT) utility subsidiary Interstate Power & Light (IPL) will apply later this year to build a 600-MW, combined-cycle natural gas power plant in Marshalltown, Iowa, which could cost an estimated $750m.

The company also said Aug. 2 that it is moving to comply with clean-air regulations and add new generating capacity.

“Our energy resources strategy is a blueprint for how our company plans to provide future generations of customers in Iowa and Minnesota with safe and reliable energy,” says Tom Aller, President of IPL. “Our plan calls for investing more than one billion dollars in IPL electric generation over the next five years. These investments will provide flexibility for the next decade and beyond to meet current and anticipated generating needs.”

There are four parts to the energy resources strategy:

  • investments to reduce emissions and increase efficiency of existing coal-fired generating fleet;
  • execution of a new nuclear purchase power agreement;
  • new natural gas-fired generation; and
  • continued commitment to renewable resources and energy efficiency.

IPL said it will continue to execute its strategy of making targeted investments in the company’s existing coal-fired fleet. IPL expects to invest approximately $430m over the next five years in its largest coal-fired plants to increase efficiency and reduce emissions.

IPL plans to file with the Iowa Utilities Board (IUB) in August for approval of a Purchase Power Agreement (PPA) recently negotiated with NextEra Energy (NYSE: NEE). If approved, the PPA enables IPL to purchase 431 MW of energy, with capacity included, from the Duane Arnold Energy Center (DAEC) from 2014 through 2025. Through this agreement IPL’s customers will continue to have access to locally-produced nuclear power from an existing plant. A decision by the IUB is expected by early 2013.

“The DAEC PPA makes financial sense for our customers,” said Aller. “Throughout our company’s long-term planning process, our focus remained on pursuing a strategy that was in the best interests of our customers. We are pleased to continue purchasing power produced in Iowa by the DAEC that will serve our customers’ energy needs at a reasonable price.”

Alliant is a former owner of the Duane Arnold nuclear plant.

New, 600-MW gas plant in the works

IPL expects to file for regulatory approvals in the fourth quarter for plans related to the construction of an approximately 600-MW, combined-cycle natural gas-fired generating station in Marshalltown, Iowa. The cost for the new facility is projected to be approximately $650m to $750m. The company expects to receive the appropriate regulatory decisions by the end of 2014. If approved, IPL expects construction to begin after approvals are received with an anticipated in-service date of the generating station in the second quarter 2017.

The company’s evaluation process of power supply options led to a combined solution of purchasing power from DAEC and construction of a new natural gas-fired facility as the best way to meet the long-term needs of customers in Iowa and Minnesota while maintaining a reasonable cost for the power. The company expects the current and long-term forecast for strong natural gas supply to benefit customers.

The company also said it remains committed to development and use of renewable resources and its energy efficiency programs. IPL’s renewable resources, which include company-owned generation and a number of renewable PPAs, are key components to a balanced power supply because they reduce dependence on fossil fuel generation. Energy efficiency programs also enable the company to manage load and mitigate cost impacts for customers. 

“Our investments in this strategy are about building upon our service area’s resiliency,” Aller said. “We believe our investments will further diversify and strengthen both Iowa’s and Minnesota’s energy future and create Iowa jobs for Iowa’s families while meeting the near- and long-term energy needs of our customers.”

IPL separately provides more details on coal plans

IPL is moving forward with new emissions control projects on coal-fired plants, including a new scrubber and baghouse installation at the Ottumwa plant in Iowa, said IPL in a July 13 filing at the Minnesota Public Utilities Commission. It filed with the Minnesota commission a cover letter and a copy of a biennial Emissions Plan and Budget (EPB) April 2 at the Iowa Utilities Board. The EPB is a multi-year plan and budget for managing regulated emissions from IPL’s coal plants in Iowa.

As part of its EPB, IPL intends to install, by 2014, a scrubber and baghouse at its Ottumwa Generating Station (OGS). OGS is a single unit, coal-fired baseload plant located in Chillicothe, Iowa. The OGS scrubber and baghouse project has an estimated total capital cost to IPL of $165m.

The EPB outlines the status of various emissions projects at IPL plants. For example, at Lansing Unit 4, low NOx burners (LNB) and selective catalytic reduction (SCR) projects went into service in July 2010. The activated carbon injection (ACI) and baghouse system at Lansing 4 went into service in July 2010. Planning is currently underway for a circulating fluidized-bed (CFB) dry scrubber for this unit. Construction activities would begin in 2013. The scrubber project is currently expected to go into service in 2015.

For Ottumwa Unit 1, IPL has gotten Iowa permit approval for construction of a new air quality control system (AQCS) that includes an ACI system and pulse jet fabric filter (PJFF) baghouse that will reduce mercury emissions. IPL has selected Burns & McDonnell and Babcock & Wilcox to complete detailed engineering and begin fabrication and construction of the ACI system and baghouse in 2012. Commissioning is scheduled for 2014. It also plans a Spray Dryer Absorber (SDA) flue gas desulfurization technology. IPL has selected Burns & McDonnell and Babcock & Wilcox to complete detailed engineering, and begin fabrication and construction of the spray dryer absorber in 2012. Commissioning is scheduled for 2014.

IPL, based in Cedar Rapids, Iowa, provides electric service to 525,000 customers and natural gas service to 233,000 customers in more than 700 communities throughout Iowa and southern Minnesota.

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.