Dayton seeks bids for 2013-2014 coal at two plants

Dayton Power and Light said Sept. 19 that it has issued a Request for Proposals (RFP) for coal for the J.M. Stuart Station, located near Aberdeen, Ohio, at Ohio River milepost 404.5, and the Killen Station, located near Wrightsville, Ohio, at Ohio River milepost 389.6.

DP&L requests proposals for both stations, FOB Barge and/or FOB Railcar, for delivery during calendar year 2013 and 2014. DP&L is seeking proposals for delivery of up to 1 million tons in 2013 and up to 1.5 million tons in 2014. Proposals with alternative quantities will be considered. DP&L said it is interested in offers for all types of coal. DP&L requests pricing for volume flexibility of 10%-25% for the term offered.

In the event that bidders have not executed a Master Fuel Purchase and Sale Agreement with DP&L, any proposed coal supply must be sold and delivered under DP&L’s Transaction Confirmation and Terms and Conditions (Annex A).

All proposals submitted in response to this RFP must be received by DP&L no later than 5 p.m. Eastern on Oct. 1. 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.

DP&L on Aug. 31 had issued an RFP for these same plants. Under that solicitation, DP&L sought proposals for coal delivery of up to 400,000 tons, with delivery beginning October 2012 and running through December 2012. That RFP had a Sept. 10 bid submission deadline.

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 station consistently burns more than 6 million tons per year, EVA noted.

The Stuart 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. 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.

DP&L is the principal subsidiary of DPL Inc., which was acquired in 2011 by AES Corp. (NYSE: AES).

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.