Crawfordsville Energy to buy, expand coal-fired plant in Indiana

Crawfordsville Energy LLC, which is an affiliate of Sterling Energy Group LLC, has filed an application to buy an old 25-MW coal plant in Indiana with hopes of eventually expanding it to about 100 MW and fueling it with waste coal.

Crawfordsville Energy LLC, on Sept. 14 filed with FERC under the Public Utility Holding Company Act of 2005 (PUHCA 2005) a Notice of Self-Certification of its status as an Exempt Wholesale Generator (EWG) related to a 25-MW, coal-fired facility in Indiana.

Crawfordsville Energy was formed for the purpose of purchasing, owning and operating the facility, and its sole member is Sterling Energy Group. It will buy a 25-MW power plant currently owned and operated by Crawfordsville Electric Light & Power (CEL&P) located in Crawfordsville, Ind. CEL&P is a municipal electric utility owned and operated by the city of Crawfordsville.

The facility will be an “eligible facility” under PUHCA 1935 and the company will be engaged directly and exclusively in the business of owning and operating an eligible facility or facilities and selling electric energy at wholesale. The facility includes only those interconnecting transmission facilities that are necessary to interconnect the plant with the transmission system and to make a sale of electric energy at wholesale.

Crawfordsville Energy attached to the notice filed with FERC a July 3 approval of the facility purchase from the Indiana Utility Regulatory Commission.

Sterling Energy Group LLC is also the sole member of two other limited liability companies: Sterling Energy LLC, in Illinois and Sterling Natural Resources LLC in Indiana. Sterling Energy specializes in retrofits for coal-fired energy plants. Sterling Natural Resources owns the rights to coal and waste coal reserves in southern Indiana. Sterling Natural Resources also has the rights to use a synthetic binder to create stoker-sized coal pellets from waste coal, the Indiana commission noted. CEL&P has agreed to provide Crawfordsville Energy with access to the transmission grid through its existing transformers at a CEL&P tariff rate.

“Mr. William J. Harrington, Petitioner’s Chief Operating Officer, testified in support of Petitioner’s requested relief,” said the Indiana commission order. According to Harrington, the facility is a 25-MW power plant consisting of three units: two coal-fired units and one diesel generator for black start capability. The facility is located on about 16 1/2 acres of land in Crawfordsville and was originally constructed in 1938. The newest boiler was placed in operation over forty years ago. Harrington stated that the facility is small, old, and runs on stoker grade coal, which is expensive and is not competitive in the current market. He stated the Facility has not operated as a baseload plant for the past few years, primarily due to the cost of fuel and the terms of payment for dedicated capacity under the former Capacity Purchase Agreement between CEL&P and its wholesale supplier, the Indiana Municipal Power Agency (IMPA). “Mr. Harrington indicated that, to his knowledge, the Facility has been operating at an annual loss,” according to the document.

Harrington testified that his firm proposed to purchase the plant after responding to a CEL&P notice requesting bids for its purchase. “At closing, Petitioner has agreed to pay the City a purchase price of $975,000,” according to the document.

Ronald Keen, a Senior Analyst with the Indiana Office of Utility Consumer Counselor, testified at the Indiana commission that, after modifications, the facility would burn pulverized waste coal, which is low-energy-value coal mined during normal coal mining operations and then discarded on site. Keen testified that the company’s proposed renovations will benefit energy generation in Indiana because, eventually, the proposed renovations will allow the facility to produce up to 100 MW. He said because the facility will sell energy in the wholesale power market, petitioner will not recover its costs from Indiana ratepayers through rate base, rate of return, or other methods typically associated with retail-rate based generation.

Company works on engineering for expanded plant

Crawfordsville Energy filed an Aug. 1 report with the Indiana commission that said about updated plans for the projected capacity of an expanded facility: “Less than 75 Megawatts: Final output to be determined by engineering/feasibility study post-closing. Currently 24.1 Megawatts coal generation and .9 Megawatt Diesel Generator.”

Harrington, in October 2011 testimony to open the Indiana case, said an associated company, Fuel Streamers of Indiana LLC, controls coal reserves in southern Indiana. “We believe that we will be able to use these reserves in order to  operate the plant at a lower cost,” he wrote. “Furthermore, we expect to make the necessary capital investments to the Facility to make it a viable, long-term generating asset once closing has occurred, to improve the efficiency, emissions, and economics of the Facility. These further actions will depend upon the results of detailed engineering analyses once we take possession of the Facility at closing.”

One potential for increasing the economic competiveness of the facility might be synthetic stoker coal, Harrington added. Fuel Streamers Inc., along with the Indiana Center for Coal Technology Research, has made a contribution to Purdue University to investigate the development of a synthetic binder. If this proves cost effective, the company would use the synthetic binder to create stoker size coal pellets from waste coal that Fuel Streamers of Indiana LLC has acquired. The planned coal processing plant, located in Pike County, Ind., will add local jobs during construction and operation of the plant.

“We will also remove some of the pollutants from the waste coal so that the Facility will operate with permitted emissions,” Harrington added. “Whether or not we will be able to use the synthetic stoker coal, other improvements may be made to the Facility and will depend upon the results of the detailed engineering analyses.”

Fuel Streamers takes over Indiana coal properties

On Dec. 30, 2011, the Indiana Department of Environmental Management approved the transfer of a 1997 air permit for a coal mine and prep plant located near Spurgeon, Ind., from Indiana Land & Mineral Co. LLC to Fuel Streamers of Indiana. The permitted operation is in Pike County. The IDEM approval letter is addressed to William Harrington at a Fuel Streamers of Indiana office in Gary, Ind.

The U.S. Office of Surface Mining database shows Fuel Streamers of Indiana as first registered with that agency on Dec. 14, 2011. It holds some old permits in Indiana formerly held by Old Ben Coal Co.Kindill Mining Inc., LCC Indiana LLC and Indiana Land & Mineral.

Kindill Mining is a Larry Addington-created company associated with Addington’s long-bankrupt Horizon Natural Resources that in the 1990s acquired two Old Ben Coal strip mines in Indiana. The two strip mines, at one time called Old Ben #1 and Old Ben #2, later renamed Pike #1 and Pike #2, were major suppliers of coal to mostly in-state electric utilities. LCC Indiana is part of Lexington Coal, which picked up a number of reclamation properties in the Horizon Natural Resources bankruptcy process.

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.