Rocky Mountain Power needs to get into construction soon, in time for the 2013 construction season (construction seasons are short in a heavy winter state like Wyoming), so it can get new selective catalytic reduction (SCR) installations in place in time at Jim Bridger Units 3 and 4.
Utility official Chad Teply provided rebuttal testimony filed March 4 at the Wyoming Public Service Commission in a case where the company is seeking approval of these SCR projects. The application was initially filed in August 2012.
“Site activities are currently expected to start in the second quarter of 2013 with confirmation of underground utilities being the initial focus,” Teply wrote. “Foundation construction is currently expected to begin in the third quarter of 2013 with piling installation. The planned completion of unit SCR tie-in is June 6, 2015, for Unit 3 and June 7, 2016, for Unit 4.”
The established environmental compliance deadlines for the Jim Bridger Units 3 and 4 SCR Project are Dec. 31, 2015, for Unit 3 and Dec. 31, 2016, for Unit 4, Teply noted. The company has scheduled tie-in of the individual unit SCRs within planned major maintenance outages for each unit. As currently planned (subject to change due to a variety of factors including the final commercial negotiations with short-listed EPC contractors as well as system needs at the time of tie-in), the tentative major maintenance outage period for Unit 3 is from March 28, 2015, through June 6, 2015, and for Unit 4 from March 12, 2016, through June 7, 2016.
The Wyoming State Implementation Plan (SIP) and a November 2010 Best Available Retrofit Technology (BART) regional haze settlement agreement and associated Wyoming Environmental Quality Commission order require that SCR, or equivalent NOX reduction equipment, be installed on Jim Bridger Units 3 and 4 by the end of 2015 and end of 2016, respectively. As such, under a scenario where SCR is not installed, Unit 3 will not be able to operate in compliance beyond the end of 2015, and Unit 4 will not be able to operate beyond the end of 2016.
Teply rebutted arguments of witnesses for the Wyoming Office of Consumer Advocate, the Wyoming Industrial Energy Consumers and the Sierra Club.
The Jim Bridger plant consists of four units and is located near Rock Springs, Wyo. These units have the following current net dependable capacity ratings:
- Jim Bridger Unit 1 (531 MW)
- Jim Bridger Unit 2 (527 MW)
- Jim Bridger Unit 3 (530 MW)
- Jim Bridger Unit 4 (523 MW)
- Total Plant – 2,111 MW
Should the currently scheduled SCR contract execution date be delayed beyond May 15, 2013, the SCR project will be at risk for increased costs and delayed tie-in, and depending upon its duration, a delay may ultimately render the project critical path schedule unachievable, Teply noted. “The SCR Project schedule and bid received have been developed to take advantage of the 2013 construction season to the greatest extent practicable,” he added. “Delays in releasing the EPC contractor to begin Project activities will result in compression to the overall project schedule. To successfully execute upon such a compressed schedule will require the EPC contractor to increase manpower, work hours, and support resources, and will also add to the complexity of construction site logistics with previously sequential construction activities becoming parallel path construction activities. With each of these schedule acceleration measures comes additional cost, and depending upon the duration of the delay may not be achievable regardless of cost.”
PacifiCorp, incidentally, delivers electricity to customers in Utah, Wyoming and Idaho under the trade name Rocky Mountain Power and to customers in Oregon, Washington and California under the trade name Pacific Power.
Crane says operating mines with lower production would have issues
Jim Bridger is a minemouth power plant that gets much of its coal from adjacent surface and deep mine operations that are co-owned by Rocky Mountain Power (two thirds of ownership) and Idaho Power (one-third), in proportion to their shares in the power plant. Cindy Crane, Vice President, Interwest Mining Co. and Fuel Resources for PacifiCorp Energy, provided March 4 testimony on the coal-related issues in this proceeding.
Subsequent to the original filing in this case, Bridger Coal completed extensive life of mine planning and cost analysis, and as a result, the company has more current and detailed mine plans to rely on as part of this analysis. A two-unit Jim Bridger operations scenario still reflects the closure of the Bridger Coal surface mine in connection with a possible conversion to natural gas of Jim Bridger Units 3 and 4 as an alternative to the SCR installations. The base case continues to reflect a two dragline operation.
Crane’s testimony is heavily redacted. What is left shows the company expects Union Pacific rail costs for outside coal, and Black Butte Coal pricing for outside coal from nearby mining operations, to increase in the future.
There is already a significant imbalance between supply and demand for coal in Southwest Wyoming, Crane noted. “With the impending gas conversion of Naughton 3, that imbalance surges,” she added. “The Company believes that under a two-unit coal operation at the Bridger plant at least one other mine in Southwest Wyoming would be shuttered. Southwest Wyoming is a niche market with limited participants. The relatively low heat content in comparison to Colorado and Utah coals and the high ash content relative to Powder River Basin coals confines Southwest Wyoming coal largely to the local area.”
Crane: shipping Bridger’s coal to other plants a bad idea
One witness suggested that Bridger Coal could competitively supply coal outside of the Jim Bridger plant, something it has not done before, to make up for the loss of business at Jim Bridger Units 3 and 4. The suggested plants to take this coal were PacifiCorp’s Huntington and Hunter plants in Utah, the Craig and Hayden plants in Colorado, and PacifiCorp’s Naughton plant in Wyoming (now supplied by Westmoreland Coal’s adjacent Kemmerer strip mine). But Crane said that would, among other things, require the expensive build of both a rail car loader at Bridger Coal and a spur connection to the Union Pacific mainline.
Plus, most of those five plants currently can’t take coal by rail, so rail facilities would have to be built at those plants, as well. Hunter and Huntington, for example, only take coal by truck or by conveyor belt from PacifiCorp’s nearby Deer Creek longwall mine, and neither plant is located near a UP mainline. The low-quality Bridger coal could also cause boiler slagging problems at the Utah power plants, Crane added.
Naughton is closer to the Bridger Coal operations, and takes a somewhat similar coal, but again has no rail unloading facilities. Also, the Westmoreland contract that runs to 2021 has a tonnage minimum that would preclude this outside coal, Crane wrote. The planned conversion of Naughton 3 to natural gas would mean that it will be tight to keep the coal burn at the two surviving coal units at or above that coal contract minimum tonnage.
“The current coal supply arrangements for Hayden extend through 2027 and for Craig through 2020,” Crane added about plants where PacifiCorp has small ownership shares. “These agreements are between the supplier and the collective plant owners not just the Company. Failure to take the minimum contract obligations would result in liquidated damages. Additionally, the coal supply agreement for Hayden is an all requirements contract; delivery of Bridger coal to the Hayden [plant] would constitute contract breach. Further, the jointly owned plants require all coal supplies to meet plant quality specifications. These quality specifications are collectively set and agreed to by the plant owners; the Company cannot arbitrarily elect to consume Bridger coal on its own account in any of the joint owned plants.”
Asked whether the Bridger surface mine could operate with only two Jim Bridger coal units running, Crane said: “This could not be done economically and not without increasing the production risk of Bridger Coal’s underground mine and potentially the safety of its employees. Operation of the surface mine at a reduced level in a two-unit operation would necessitate a further reduction in the underground mine production. Due to the geological characteristics of the roof for the underground mine, the Company cannot shutdown the longwall machine, the main piece of mining equipment for the underground mine, for an extended period of time once longwall mining has commenced operation in a panel. Once a longwall panel is depleted and the longwall machine is relocated to a new panel and setup face, the Company may be able to idle the longwall machine depending on geologic conditions in the localized area and the propensity for convergence. However, idling of the longwall system, which typically produces 80-85 percent of the underground mine’s coal production, would create significant disruptions to the efficient utilization of resources and result in higher costs.”
Notable is that current plans call for Jim Bridger Unit 1 to get an SCR operating in 2022 and a Unit 2 SCR in operation in 2021, but those projects are not covered by this current PSC proceeding.