AEP seeks alternatives to Big Sandy Unit 1 shutdown, gas conversion

Kentucky Power on March 29 filed with the Kentucky Public Service Commission a copy of a March 28 request for proposals for capacity to replace the to-be-shut, coal-fired Big Sandy Unit 1.

Big Sandy Unit 1 is a 260-MW coal-fired facility that went into service in 1963 and is currently scheduled for retirement in 2015. Big Sandy Unit 1 is located near Louisa, Ky., within the PJM Interconnection regional transmission organization.

The options available to the company for the replacement of the Big Sandy Unit 1 generation capacity as a coal-fired generation resource include:

  • BS 1 Conversion: converting Big Sandy Unit 1 to a natural gas-fired generation unit. The projected cost to convert Big Sandy Unit 1 will be developed by American Electric Power Service Corp.’s (AEPSC) Projects, Controls & Construction group; and
  • PJM Capacity Resource Request for Proposals: issue an RFP for 250 MW of PJM Generation Capacity Resources.

The company said it will use the proposals received in this RFP along with the BS 1 Conversion cost estimate to determine solution to replacing the Big Sandy Unit 1 capacity as a coal facility. The company said that in its sole discretion it will determine which direction, if any, it wishes to take with respect to replacing the Big Sandy Unit 1 coal-fired generation capacity, energy, and ancillary services.

Resources bid into this RFP must be capable of being on-line by June 1, 2015 and able to supply a “Bundled Product” that includes Capacity (MW), Energy (MWh), and Ancillary Services, if available. AEPSC is requesting proposals from parties desiring to sell a Bundled Product through a Power Purchase Agreement (PPA), Tolling Agreement (TA), an Asset Purchase Agreement (APA), or Other Proposal (OTH). In addition, AEPSC will be accepting proposals for demand-side management (DSM) and cost-effective energy efficiency (EE) resources.

Proposals under the RFP must be submitted by June 11.

This RFP was filed with the Kentucky commission in an ongoing case where Kentucky Power is seeking permission to shut the 800-MW, coal-fired Unit 2 at Big Sandy in 2015, and replace that capacity by transferring to its service half of the coal-fired Mitchell power plant. Big Sandy Unit 2, of supercritical pulverized coal design, for technical reasons is not considered a coal-to-gas-conversion candidate like the subcritical Unit 1.

The Mitchell plant is located near Moundsville, W.Va., and has a total generating output of 1,560 MW. Kentucky Power would get 50% of the output of Mitchell’s 770-MW Unit 1 and 790-MW Unit 2, for a total transfer of 780 MW. Both Mitchell units are equipped with advanced environmental controls, including scrubbers, and meet all current U.S. Environmental Protection Agency requirements. The other 50% ownership in the Mitchell units would be transferred to Appalachian Power, another AEP subsidiary, pending approval of APCo’s regulatory authorities, including the West Virginia Public Service Commission. APCo will operate and maintain the Mitchell plant.

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.