Bankrupt Midwest Generation LLC won a two-year break on April 4 from the Illinois Pollution Control Board on a deadline to install air emissions controls on some of its coal-fired generating capacity in the state.
Last December, Midwest Generation and parent Edison Mission Energy sought Chapter 11 protection at the U.S. Bankruptcy Court for the Northern District of Illinois. Just before that, Midwest Gen pursued a break at the Illinois board on a state air emissions mandate so that it could save money in the meantime, while it works on a plan to turn over its assets to creditors.
Midwest Gen petitioned the board for a variance from certain air pollution control requirements applicable to specified electric generating units (EGUs) at several of the company’s coal-fired power plants. It asked for relief both from provisions of the Combined Pollutant Standard (CPS) regulations and from a condition of the board’s order in a 2012 decision involving the Waukegan coal plant.
Five of Midwest Generation’s electric generating stations with coal-fired boilers were at issue in the proceeding decided April 4: Crawford Generating Station (Cook County); Joliet Generating Station (Will County); Powerton Generating Station (Tazewell County); Waukegan Generating Station (Lake County); and Will County Generating Station (Will County).
In its petition filed Nov. 30, 2012, Midwest Gen asked for a variance from three requirements.
- First, the company sought relief from the system-wide average annual SO2 emission rates for the two-year period of Jan. 1, 2015, through Dec. 31, 2016, allowing a delay of a $210m scrubber project at Waukegan Unit 8. It has committed to not operate Waukegan Unit 8 from the end of 2014 until the scrubber is installed.
- Second, Midwest Generation sought relief for a period of five months, delaying a requirement until May 31, 2015, for it to install flue gas desulfurization equipment on, or permanently shut down, Waukegan Unit 8 by Dec. 31, 2014.
- Third, Midwest Generation sought relief from a condition in the 2012 Waukegan order that requires it to meet, from Dec. 31, 2013 until Dec. 31, 2014, a system-wide SO2 emissions rate.
Midwest Generation told the board that it is still planning to spend $230m in 2013 and 2014 to install controls on Powerton Unit 6 and Waukegan Unit 7, along with engineering and procurement for controls on other units.
The Illinois Environmental Protection Agency told the board that it “neither supports nor objects to” the board granting Midwest Generation’s petition. The board said it received 4,221 timely public comments in favor of granting Midwest Generation’s variance petition, and 4,326 timely comments opposed.
Board allowed most of what Midwest Gen wanted
“For the reasons detailed in this opinion, the Board finds that Midwest Generation has proven that compliance with the CPS regulations at issue would impose an arbitrary or unreasonable hardship on the company,” the board ruled. “This record supports the finding that the requested variance from those regulations will cause no significant negative impact on the environment and, in fact, will result in an overall reduction in emissions of several pollutants, including SO2. Further, the relief sought from the CPS is consistent with federal law and Illinois’ obligation to comply with the federal Clean Air Act’s regional haze requirements, as well as to attain and maintain compliance with the National Ambient Air Quality Standards (NAAQS).”
Due to this decision, Midwest Generation’s CPS Group is not subject to the average annual SO2 emission rates of 0.28 lb/mmBtu) in 2015 and 0.195 lb/mmBtu in 2016, until Jan, 1, 2017, at which point the CPS emission rates apply, beginning with 0.15 lb/mmBtu for 2017. Further, Midwest Generation is not subject to the requirement to install and have operational flue gas desulfurization (FGD) equipment on, or permanently shut down, Waukegan Unit 8 by Dec. 31, 2014, for a period of five months, i.e., until May 31, 2015, at which point Waukegan Unit 8 must have FGD equipment installed and operational or be permanently shut down.
The conditions to which the variance is subject include a requirement to not operate the already-idled coal-fired boilers at the Crawford Station from the date of this order through Dec. 31, 2014, which is when they are required to be permanently shut down. Also included are conditions limiting system-wide emissions of SO2 to no more than 57,000 tons in 2013, 54,000 tons 2014, 39,000 tons in 2015, and 37,000 tons in 2016. For the purposes of this variance, “system-wide” entails the following coal-fired units: Joliet Units 6, 7, and 8; Powerton Units 5 and 6; Waukegan Units 7 and 8; and Will County Units 3 and 4.
The board denied as unnecessary Midwest Generation’s request for relief from the condition in the Waukegan order, since the rest of the decision accomplishes the same goal.
Coal-to-gas conversions not considered a viable option
The board noted that Midwest Gen ruled out any coal-to-gas conversions to meet its CPS needs. “The only units that have access to natural gas sufficient to operate at full load would be Fisk Unit 19 and Crawford Units 7 and 8, however, these units have been shut down,” said the board order. “To provide sufficient gas for full load operation for units at other plants would require significant investment. Based on industry experience in the construction and operation of both conventional boiler fired and new combustion turbine gas plants as well as in economics of coal and natural gas, Midwest Generation determined that a gas conversion would not be an economically viable compliance option.”
The involved plants are:
- Crawford – The two coal-fired units at Crawford, with 532 MW of capacity, went online between 1958 and 1961. In the Waukegan order, the board ordered Midwest Gen to shut down the coal-fired units at Crawford by Dec. 31, 2014. Midwest Gen actually ceased operation of those coal units by the end of August 2012, over two years early.
- Joliet – These coal-fired facilities went online between 1959 and 1966. Midwest Gen operates five coal-fired boilers at Joliet that have the capability to fire at various modes that include the combination of coal or natural gas as principal fuels. Joliet 6 has a capacity of 290 MW, and Units 7-8, across the Des Plaines River from Unit 6, have a combined 1,036 MW.
- Powerton – These 1,538-MW facilities went online between 1973 and 1976. Midwest Gen operates four coal-fired boilers and an auxiliary boiler at Powerton that have the capability to fire at various modes that include the combination of coal and/or natural gas as their principal fuels.
- Waukegan – The 689-MW facilities at Waukegan went online between 1958 and 1962. Midwest Gen operates two units at Waukegan with the capability to fire coal, or a mixture of gas and coal, as their primary fuel. Pursuant to the CPS, Midwest Generation permanently retired Waukegan Unit 6 by the end of 2007.
- Will County – These 761-MW facilities went online between 1957 and 1963. Midwest Gen operates two coal-fired boilers at Will County that have the capability to fire at various modes that include the combination of coal, petroleum coke, and/or fuel oil as their principal fuels. Midwest Gen permanently retired Will County Units 1 and 2 under the CPS in December 2010.