The gas-fired Pueblo Units 5 and 6, which Black Hills/Colorado Electric Utility Co. LP wants to retire around the end of 2013, are currently in economic shutdown and are not expected to be needed this summer for peaking purposes.
David (Andy) Butcher, employed as the Director of Generation Dispatch and Power Marketing for Black Hills Power Inc., a wholly-owned subsidiary of Black Hills Corp., made those points in April 30 testimony filed at the Colorado Public Utilities Commission in a case where the utility is seeking approval of these retirements. Butcher was testifying on behalf of Black Hills/Colorado Electric Utility Co. LP, d/b/a Black Hills Energy.
“Pueblo 5 and 6 are currently in ‘economic shutdown,’” Butcher wrote. “The term ‘economic shutdown’ means that the units are not currently operating but can be reactivated with thirty-days’ advance notice. Since 2008, these units have been used solely as peaking units and were always placed in a shutdown state in non-summer months. In August of 2012, it was determined that seasonal firm market power was a more economical and efficient way to meet the capacity requirement. We then placed Pueblo 5 and 6 into economic shutdown and plan to keep the units in a shutdown state unless significant system or market changes occur.”
For both Pueblo 5 and 6, it is not currently economic to operate them because of their inefficiency and inflexible operational constraints. Black Hills does not foresee this changing.
Butcher said he sees no reason why Black Hills would need to reactivate Pueblo 5 and 6 during the coming year or anytime in the near future. Based on forecasted natural gas prices and compared to the types of generating units that exist today, it is unlikely that Pueblo 5 and 6 will be an efficient, economical choice to provide power to customers, he added.
Pueblo 5 and 6 are inefficient to operate because their operational heat rate is much higher than the rest of the company’s generation fleet. Based on their heat rates, and given the projected availability of economic purchases, these units will not be an economic option for the foreseeable future. A high heat rate results in less efficient power generation.
The average heat rate for Pueblo 5 is 14,900 Btu/kWh and the Pueblo 6 average heat rate is 13,613 Btu/kWh. New combined-cycle units achieve a significantly better efficiency of 7,500 Btu/kWh. Heat rates for new aeroderivative combustion turbines are expected to achieve an efficiency of 9,500 Btu/kWh. At an assumed cost for natural gas of $3.00/MMBtu, the comparative costs to generate electricity for these four options are: Pueblo 5–$44.70/MWh; Pueblo 6–$40.80/MWh; Combined Cycle–$22.50/MWh; and Aeroderivative combustion turbine–$28.50/MWh.
Both of these old coal units too slow off the mark during restarts
Pueblo 5 could be brought to load during a startup in 8 to 10 hours. Pueblo 6 requires 24 hours to reach full load due to the age of the boiler. In comparison, a simple-cycle combustion turbine can be brought to full load in 10 minutes and a combined-cycle unit can be brought to full load in approximately 90 minutes, Butcher noted. Because it takes so long to bring Pueblo 5 and 6 to full load, once these units are on-line, they must operate 24 hours each day, 7 days a week until they are taken out of service. Because the cost to operate the units is higher than the marginal cost of energy in the market during light load hours, operating the units full-time is not in the best interests of customers.
“In my opinion, Pueblo 5 and 6 should be retired,” Butcher added. “They should no longer be part of the operating generation fleet. In addition to their age and the difficulty in bringing them to full load, it is clear that other generation choices would be much more efficient, cost-effective resources for customers.”
Bryan Owens, employed by Black Hills Utility Holding Co. as Manager–Colorado Electric Regulatory Affairs, said in companion testimony that a Request for Proposal (RFP) has been issued seeking cost estimates for the decommissioning of Pueblo 5 and 6. Bids are expected to be received in May. After bids are received, Black Hills will be in a better position to determine the expected cost of removal and net salvage associated with the decommissioning of Pueblo 5 and 6.
Pueblo 5 and 6 are steam turbine units located in Pueblo, Colo., behind the Black Hills service center building. The site consists of these two units enclosed in a brick building, a chimney, a cooling tower, and the Pueblo plant transmission/distribution substation. A third generating unit, Pueblo 4, ceased operations in 1989. The two surviving units together total 29 MW of capacity
- Pueblo 5, rated at 9 MW, was commissioned in 1941 as a coal-fired unit. It was later converted to natural gas. A package boiler was installed to replace the original boiler approximately 10 years ago.
- Pueblo 6, rated at 20 MW, was commissioned in 1949 as a coal-fired unit. It was also later converted to natural gas. The original boiler has not been replaced.
Through the Title V Operating Permit, Pueblo 5 is permitted to fire only natural gas. Pueblo 6 is permitted to be fired by natural gas and was formerly permitted to use diesel (No. 2 fuel oil) or biodiesel (B20) as a backup fuel. The fuel line connection was removed in 2011 and the permit was modified to allow natural gas operation only.