West Virginia Coal Association President Bill Raney sent a Dec. 27 letter to the state Public Service Commission in support of a plan by Monongahela Power and Potomac Edison to transfer to their service a portion of the coal-fired Harrison power plant in northern West Virginia.
Raney urged the commission to approve the Mon Power/Potomac Edison proposal to purchase full ownership of the Harrison plant, located at Haywood, W.Va. “This far-sighted plan would help ensure West Virginia residents and businesses have a continued supply of reliable, low-cost electricity for years to come,” he added.
Mon Power and Potomac Edison face serious shortfalls in capacity and electricity, Raney noted. “But rather than putting its customers at significant risk by relying on volatile spot market purchases of capacity and electricity, Mon Power has developed a prudent plan to purchase a proven generation asset in the heart of West Virginia,” he added. “The Harrison plant produces electricity with locally mined West Virginia coal, consuming more than 5 million tons each year. Mon Power’s plan would preserve the opportunity to use this vital resource, helping to support our hard-working miners and their families, as well as the many businesses that depend on the mines. Harrison also benefits governments, paying local and state taxes.”
With strict environmental rules idling many coal-fired plants at every corner, parties can’t take opportunities to utilize West Virginia coal for granted any longer – particularly one of this magnitude, Raney said. “Long the economic backbone of our state, the coal industry has struggled in recent years to fend off an all-out assault against coal that threatens the very future of our people and state. Mon Power’s desire to acquire full ownership of Harrison and operate it to the benefit of its customers for years to come is one of the few bright spots in what has otherwise been a very challenging 2012 for the state’s 20,000 miners and 70,000 spin-off workers who make an honest living from coal.”
Harrison is one of the largest and cleanest coal-fired plants in the nation with nearly $1bn invested in its modern environmental controls, Raney wrote. “Although some other people have suggested that Mon Power should purchase the capacity and electricity elsewhere, importing it from an adjoining state or several states, that would not benefit West Virginia’s workers and our communities, nor would it help our coal industry, which generates more than $6 billion each year in total economic impact for the state,” he added.
The West Virginia Coal Association did request that the commission require Mon Power and parent FirstEnergy (NYSE: FE) to use their best efforts to purchase coal mined in West Virginia for Harrison as well as the Pleasants plant. The commission has in past years mandated a small operator set-aside at Harrison, in the heart of the state’s high-sulfur Northern Appalachia coalfield, so some type of coal purchasing requirement is not unprecedented.
Utilities say Harrison transfer best way to meet a capacity shortfall
Mon Power and Potomac Edison applied Nov. 16 at the West Virginia PSC to transfer certain generating assets controlled by affiliates of FirstEnergy to their retail service. In the Nov. 16 petition, the companies identified a significant deficit in the generating capacity available to serve their customers. To address this deficit, the companies propose a generation resource transaction that will increase Mon Power’s net installed capacity by 1,476 MW.
The centerpiece of the transaction is Mon Power’s acquisition of the 79.46% ownership interest currently held by Allegheny Energy Supply Co. LLC (AE Supply) in Harrison. This acquisition, when added to Mon Power’s existing ownership in Harrison, will make Mon Power the sole owner of Harrison. At the same time, AE Supply will acquire Mon Power’s 7.69% ownership interest in the coal-fired Pleasants plant, resulting in AE Supply’s sole ownership of Pleasants.
The companies proposed that the transaction be closed not later than May 1, 2013. To achieve this closing date and to allow time for the Federal Energy Regulatory Commission to issue its order after the West Virginia commission enters its order, the companies recommend that the PSC enter an order approving the transaction and related relief by April 15, 2013.
As reflected in the companies’ Resource Plan filed with the PSC on Aug. 31, 2012, their forecasted capacity requirement in 2013 is 3,021 MW, while Mon Power’s available capacity resources are only 2,083 MW. This equates to a 938 MW deficit of capacity needed to serve West Virginia customers. This projected deficit continues to increase each year, reducing the companies’ capacity resource coverage to only 60% of their projected need by 2026 without decisive action, the application said.
Currently, Harrison uses nearly 5 million tons of coal annually in normal operations, all of which is supplied from local West Virginia mines. Harrison is a 1,984-MW facility. Unit 1 came on line in 1972 and has a capacity of 662 MW; Unit 2 came on line in 1973 and has a capacity of 661 MW; and Unit 3 came on line in 1974 and has a capacity of 661 MW.
Pleasants is a 1,300-MW pulverized coal facility located in Willow Island, W.Va. Pleasants has two turbine generating units, each of which came on line in 1979 and has a capacity of 650 MW.
FirstEnergy prepping Harrison plant for non-West Virginia coals
The threat of Harrison going to non-West Virginia coal is apparently very real. FirstEnergy has been permitting a new railcar unloader for Harrison that will allow it to rail in Illinois Basin and Powder River Basin coal.
The West Virginia Department of Environmental Protection was taking public comment until Nov. 8, 2012, on an air permit change that would allow construction of a Rapid Discharge Railcar Unloading (RDRU) system capable of unloading a maximum of 3,000 tons of coal per hour and 5 million tons of coal per year. The existing rotary rail car dump is being upgraded to a bottom dump RDRU. The railcars will enter the enclosure where the coal will be discharged through the bottom of each railcar, while the train continues to travel at a minimal speed to allow full unloading, the DEP noted.
“This upgrade will increase the rate of unloading from 1,500 tons per hour to 3,000 tons per hour,” the agency said in an engineering evaluation report. “A belt feeder will regulate the feed rate from the train to the conveying system at a maximum 3,000 tons per hour. The conveying system will be able to load out to either an existing stacking tube, to a new stacking tube, or split the material so that up to 1,500 tons per hour is fed into the existing conveyor system. The material at the new stacking tube will then be reclaimed through the existing stacking tubes reclaim system. Currently, there are two existing stacking tubes located in the coal pile that will remain in place.”