Northern Indiana Public Service (NIPSCO) is making progress with a program to add new emissions controls on coal-fired capacity and is looking for Indiana Utility Regulatory Commission approval for a third round of those projects.
Kurt Sangster, Director, Major Projects, updated the commission on those projects in Aug. 1 testimony to begin the company’s latest environmental cost review case. By a March 2011 petition, NIPSCO requested, among other things, a certificate of public convenience and necessity for sixteen clean coal technology projects to allow it to comply with various existing and upcoming federal and state environmental requirements. That cause was subsequently divided into three phases.
- The commission initially approved three of the projects in Phase I, including: Schahfer Unit 14 flue gas desulfurization (FGD) facility addition; Schahfer Unit 14/15 FGD common facilities; and Schahfer Unit 15 FGD addition.
- Then for Phase II, the commission approved NIPSCO’s request for: Bailly Unit 7 selective catalytic reduction (SCR) duct burners; Bailly Unit 8 SCR duct burners; Schahfer Unit 14 SCR duct burners; Schahfer Unit 15 selective non-catalytic reduction (SNCR) installation; and continuous particulate monitors (CPM) for Units 7, 8, 14, 15, 17 and 18 at Bailly and Schahfer.
- At the evidentiary hearing held prior to the issuance of this order, the commission granted the parties’ request to further bifurcate the proceeding to address and resolve the following Michigan City plant projects in Phase III: Unit 12 FGD facility addition; Unit 12 SCR water side bypass technology; and Unit 12 CPM addition.
On June 13, NIPSCO submitted a joint proposed order on behalf of NIPSCO, the Office of Utility Consumer Counselor and the NIPSCO Industrial Group which recommended that the commission grant NIPSCO a CPCN for the Phase III projects subject to certain conditions. NIPSCO anticipates that the commission will approve the Phase III projects prior to the Nov. 1, 2012, effective date of the new Environmental Cost Recovery Mechanism (ECRM) factors proposed in this proceeding.
NIPSCO is also requesting approval of its Tenth Progress Report on its environmental compliance plan. Since its Ninth Progress Report, NIPSCO has identified aspects of its compliance plan that require further modification, including inclusion of the Phase III projects. The plan modifications can be broken down into several categories: scheduling changes, scope changes, changes in estimated costs, changes in the allocation of estimated costs between the three Schahfer FGD projects (Unit 14 FGD, Unit 15 FGD and common facilities for Unit 14 and 15), and the addition of the Multi-Pollutant Compliance Plan Phase III Projects. The construction start dates for the Unit 15 SNCR installation and continuous particulate monitors additions for Units 7, 8, 17, 18 were revised to show the actual start of construction dates.
The scope of the Unit 14 SCR reheat project has been changed from duct burners to economizer waterside bypass for SCR reheat after preliminary engineering, as the economizer waterside bypass would allow NIPSCO to comply with the regulatory requirements at a lower cost. NIPSCO initially reviewed several SCR reheat technologies with an eye toward Bailly Units 7 and 8 because those units have the longest start-up times in NIPSCO’s generation fleet and, consequently, the longest time when the SCRs do not operate. NIPSCO selected duct burners as the preferred SCR reheat technology for the Bailly units because duct burners increase the temperature of the flue gas entering the SCR over a broader operating range and during start-up and shut-down. Some of the alternate SCR reheat technologies such as waterside bypass allow the SCR to operate during periods of low load but do not allow the SCR to operate during start-up and shut-down.
NIPSCO commenced preliminary engineering studies for SCR reheat at Units 12 and 14 during the summer of 2011 and also continued to study the NOx emissions data at Units 12 and 14; specifically the number and duration of startups and the number of times the units were operated at low load levels. NIPSCO determined that uncontrolled NOx emissions during startup historically has not been as significant a problem for these units as it has been for the Bailly units. As a result, NIPSCO determined that Units 12 and 14 only need SCR reheat technology during periods of low load operation in order to meet the 36S-day rolling average emission rate limits set forth in an emissions consent decree with the U.S. Environmental Protection Agency.
Schahfer FGD projects on schedule and on budget
The three Schahfer FGD projects are on-schedule and on-budget and the total cost estimate for the three Schahfer FGD projects has not changed at $500m total. Since NIPSCO provided the allocation of these costs in May of 2011, the Schahfer FGD projects have progressed significantly. As the engineering and construction have progressed, NIPSCO has identified that due to the technology selected and the application of internal accounting rules, more costs should be allocated to the “Common Facilities” work order and less costs should be allocated to the individual FGD work orders at Units 14 and 15. As a result, NIPSCO is now projecting: the Unit 14 FGD will cost $148.3m, down from the $203m cost estimate approved in the Phase I order; the Unit 15 FGD will cost $139.6m, down from the $193m cost estimate approved in the Phase I order; and the common facilities will cost $212.1m, up from the $104m cost estimate approved before. These three changes net to zero, since the total cost estimate remains $500m.
The proposed revised total cost estimate for all compliance plan projects is $803.9m. This represents an increase of $239.8m from the currently approved amount. However, $246.4m of the increase is due to the inclusion of the Phase III Projects (Unit 12 FGD, $239m; Unit 12 economizer water side bypass, $7m; and Unit 12 CPMs, $375,000). Excluding the Phase III projects, the revised total cost estimate represents a decrease of $6.6m from the currently approved amount.
NIPSCO parent NiSource (NYSE: NI) said about this case in its July 31 Form 10-Q filing: “On March 22, 2011, Northern Indiana filed a petition with the IURC for a certificate of public convenience and necessity and associated relief for the construction of additional environmental projects required to comply with the [notice of violation] consent decree lodged in the United States District Court for the Northern District of Indiana on January 13, 2011. This petition has since been trifurcated into three separate phases. On December 28, 2011, the IURC issued an order for the Phase I projects estimated to cost $500 million and granting the requested ratemaking and accounting relief associated with these Phase I projects. On February 15, 2012, the IURC issued an order for the Phase II projects. The proposed construction of a FGD unit on Michigan City Generating Station Unit 12 is the subject of Phase III of this proceeding. The evidentiary hearing for the Phase III projects was held on May 10, 2012. No party opposed Northern Indiana’s request. An order is anticipated in the second half of 2012.”
NIPSCO was issued a revised permit Feb. 23 by the Indiana Department of Environmental Management covering installation of forced oxidation limestone FGD systems on Unit 14 and 15 of the coal-fired R.M. Schahfer power plant. The permit also covers selective non-catalytic reduction technology for NOx control to be installed on Schahfer Unit 15. NIPSCO had actually gotten the air permit for these projects in April 2011, with the agency on Feb. 23 approving needed revisions to that permit.
Unit 14 is a cyclone coal-fired boiler where construction commenced in 1970 and commercial operation began in 1976. It has a design heat input capacity of 4,650 million Btu per hour (MMBtu/hr), using an electrostatic precipitator (ESP) for control of particulate matter and exhausting to stack 14. Unit 14 has an SCR system, and has continuous emissions monitoring systems (CEMS) for monitoring NOx and SO2 and a continuous opacity monitoring (COM) system. NIPSCO plans to install a reagent injection system on Unit 14 by 2014, the revised permit noted. Under a federal consent decree, NIPSCO plans to install and operate an FGD system on Unit 14 by 2014.
Unit 15 is a dry bottom pulverized coal-fired boiler, with construction commenced in 1974 and commercial operation begun in 1979. It has a design heat input capacity of 5,100 MMBtu/hr, with low NOx burners (replaced in 2008-2009) and using an ESP with a flue gas conditioning (FGC) system for control of particulate matter. Emissions exhaust to stack 15. Unit 15 has CEMS for monitoring NOx and SO2, and a COM system. NIPSCO plans to install a reagent injection system on Unit 15 by 2016. Under the federal consent decree, it plans to install and operate an SNCR system on Unit 15 by 2013 and an FGD system by 2016.
NIPSCO’s three coal-fired plants – Bailly, Michigan City and Schahfer – have a net capability of 2,574 MW. The utility also owns and operates Sugar Creek, a combined-cycle gas turbine plant with a 535 MW rating, four gas-fired generating units located at its coal-fired stations with a net capability of 203 MW and two hydroelectric plants with a net capability of 10 MW. These facilities provide for a total system operating net capability of 3,322 MW.