The Wisconsin Department of Natural Resources went out for public comment Oct. 22 on its preliminary air permit revision approval that would allow Wisconsin Electric Power to burn subbituminous Powder River Basin coal at two units of its Oak Creek plant in Milwaukee County.
The affected boilers, built last decade at the Oak Creek site and known as the Elm Road project, had previously been permitted to burn just bituminous coal. A Nov. 2 hearing in Milwaukee is planned on the draft revision, with public comment taken until Nov. 21.
“These two boilers were only allowed to combust bituminous coal (along with small amounts of natural gas) in the air permit issued 2004,” said a state DNR permit document. “WE is applying to be allowed to burn subbituminous coal either in combination with bituminous coal or as the sole coal combusted in these boilers. The main purpose of this project, as stated by the applicant, is to use lower cost subbituminous coal in the boilers and potentially save WE and ratepayers millions or tens of millions of dollars annually. These savings are realized due to the substantially lower cost on a $/MMBTU basis of subbituminous coal in comparison to bituminous coal.”
In order to combust a high level of subbituminous coal, the utility believes a number of physical changes to the boiler may be required, the DNR noted, including:
- Air heater and tube section corrosion protection;
- Additional boiler slag cleaning equipment;
- Additional or modified air heater baskets to maintain unit performance;
- Duct burners to maintain unit performance;
- Additional coal silo(s), feeder(s) and pulverizer(s) (mills) for additional coal capacity; and
- Modified coal silo chute for feeding a new pulverizer.
“The applicant does not anticipate that physical changes to the material handling systems will be required to utilize subbituminous coals in these units,” said the DNR. “However, as the conversion to subbituminous coals progresses, the applicant may conclude that new coal blending equipment may be necessary. New coal blending equipment may include new conveyors, new transfer houses, and/or new coal storage silos. Other material handling system changes may include additional coal pile storage including base material and dust control equipment, and crusher upgrades for additional pre-crushing. In addition, coal system upgrades to blend or transport subbituminous coal may include: transfer points, conveyors, chutes, portal reclaimer, controls, logic, dust collection and control systems, scales, washdown, building enclosures, fire protection, safety systems, miscellaneous mechanical and electrical support. If new or modified coal handling equipment is identified as required equipment in the future, a new construction permit to install this new equipment will be required.”
Wisconsin Electric considered PRB coal when these units were designed
Wisconsin Electric Power said it started considering the possibilities of a blend of Pittsburgh No. 8 seam coal and PRB coal for the two new units at its Elm Road Generating Station (ERGS) as far back as 2004, when those units were designed. Within a biennial review of the company’s costs and rates, WEPCO on May 16 filed with the Wisconsin Public Service Commission answers to various questions.
WEPCO is a unit of Wisconsin Energy Corp. (NYSE: WEC). ERGS is a two-unit facility with a total of 1,056 MW (dependable) of capacity.
One question said: “By letter dated September 7, 2004, Bechtel requested that We Power issue a Proposal Request (CPR) for certain contract changes that We Power was interested in, one of which related to coal blending (response to data request JJW-013012 Part 1). Please explain when the idea of coal blending for ERGS was first discussed within Wisconsin Energy Corporation or any of its subsidiaries or affiliates. Please provide copies of the internal documents of Wisconsin Energy Corporation or any of its subsidiaries or affiliates that support that explanation.”
The response said the first documented record on coal blending, an email, was in July 2004. In a July 2004 spreadsheet, a graph was produced which identified what blends of coal would meet a proposed U.S. Environmental Protection Agency rule limit and the existing air permit limit.
Copies of some of this correspondence were attached to the response. That correspondence shows that the “design” coal for the Elm Road units was Pittsburgh No. 8 coal. This coal comes from mines in Northern Appalachia (Ohio, Pennsylvania and northern West Virginia), with CONSOL Energy (NYSE: CNX) a major supplier of that type of bituminous coal.
Said one July 2004 email: “Steve’s approach has been to look first at a blend rather than a complete switch to PRB. He’s taking incremental steps i.e. gradually increasing the % of PRB to see how mercury emissions change versus the current permit and potential new regulations. I appreciate that blending and fuel switching have their own issues.”
Another email from that month said: “There are several issues that we will need to discuss including the ability to remove Mercury from PRB fired units, changes in the Hg emission limits from [bituminous] fired units, impact on unit efficiency that occurs firing [sub-bituminous] units and therefore increase CO2 emissions, gypsum production and limestone consumption – if the numbers are too small there are no practical takers for this product, increased number of trains to the site and the like.”
Parent Wisconsin Energy addressed the matter this way in its May 3 Form 10-Q filing: “The Oak Creek expansion units were designed and permitted to use bituminous coal from the Eastern United States rather than sub-bituminous coal. Market forces have resulted in a significant price differential between bituminous and sub-bituminous coals. We have applied for a new air permit from the WDNR to modify the Oak Creek expansion units for potential future use of sub-bituminous coal. Upon receiving an air permit, we intend to begin testing sub-bituminous coal in various combinations with bituminous coal to identify any equipment limitations that should be considered prior to filing with the PSCW for a Certificate of Authority to make the fuel flexibility modifications permanent.”
U.S. Energy Information Administration data shows Elm Road in January getting coal from three operations, all of them in the Pittsburgh #8 seam. They are the Blacksville No. 2 longwall mine and Bailey complex of CONSOL Energy, and the Emerald longwall mine of Alpha Natural Resources (NYSE: ANR). Notable is that the neighboring, older Oak Creek plant already burns PRB coal.