The Georgia Public Service Commission approved the outright shutdown, or switching to gas, of several coal-fired units of Georgia Power in an integrated resource plan (IRP) case.
The verbal approval of the IRP came on July 11, with the final written order not issued until July 17.
Among the commission’s findings:
The requests to decertify and retire Plant Branch Units 3 and 4, Plant Boulevard Units 2 and 3, Plant Kraft Units 1-4, Plant McManus Units 1-2, and Plant Yates Units 1-5 are approved.
Georgia Power witnesses testified that the company explored all feasible options for compliance with the current and anticipated environmental rules, comparing the projected value of continued operation of the units to the value of replacement generation. Decertification of these units was not been contested by any party and the commission found it reasonable as a matter of fact to approve decertification and retirement of the units.
Here is an outline of the targeted units for shutdown as described in the IRP:
- Branch Units 3-4 are fired with coal, have a total capacity of 509 MW and 507 MW, respectively, and were placed in service in 1968 and 1969, respectively.
- Kraft Units 1-4 are coal-fired units that were placed in service at various times between 1958 and 1971 and have a total capacity of 316 MW.
- McManus Units 1-2 are oil-fired steam facilities that went into service in 1952 and 1959, respectively, and have 43 MW and 79 MW of capacity, respectively.
- Yates Units 1–5 are coal-fired units that were placed into service at various times between 1950 and 1958 and have 579 MW of total capacity.
- Boulevard Units 2-3 are oil-fired combustion turbines (CT) rated at a capacity of 14 MW each, and were installed in 1970 along with Unit 1. Both units recently experienced a significant equipment failure and the company’s economic analysis demonstrates that the repairs are not in customers’ best interest. Boulevard Unit 1 is not damaged, remains cost-effective, and was recommended for continued operation.
The company’s Mercury and Air Toxics Standards (MATS) compliance plan for Plant Bowen Units 1-4, Plant Wansley Units 1 and 2, Plant Scherer Units 1-3, and Plant Hammond Units 1-4 was approved.
Due to the changes from the proposed MATS rule to the final rule, Georgia Power found that MATS compliance could be achieved by installing more cost-effective control methods than first planned. The MATS compliance plan for these units was no contested by any party.
The fuel switch at Plant Yates Units 6 and 7 and Plant McIntosh Unit 1 was approved.
There would be fuel switch at Plant Yates Units 6 and 7 from coal to natural gas. Plant McIntosh Unit 1 will switch from bituminous coal to Powder River Basin (PRB) coal. Due to changing environmental standards, it is no longer cost-effective for Plant Yates Units 6 and 7 to burn coal. A company panel expressed its confidence in the company’s ability to provide for sufficient natural gas supply and testified with regard to the company’s processes in obtaining natural gas and their extensive experience in managing the fuel supply for its gas-fired resources.
Georgia Power agreed to provide semi-annual updates with regard to the status of the natural gas delivery outlook and fuel supply plans until the fuel switch of the Yates units are completed. If necessary the company will include in its report any corrective action or contingency plans with regard to fuel supply. The commission found that as a matter of fact it is reasonable to adopt the company’s estimates of future prices of PRB coal and the availability of natural gas at Plant Yates Units 6 and 7, with associated reporting, and to approve the fuel switches at both Plant Yates 6 and 7 and Plant McIntosh Unit 1.
No intervenor offered any alternative economic analysis with respect to Plant McIntosh Unit 1. However, the Sierra Club’s witness criticized the company’s long-term forecast of PRB coal prices. His analysis, however, relied on a price forecast for PRB coal that the forecaster admitted was high by virtue of assuming large increases in production without considering counterbalancing efficiency improvements from new technologies in the mining process, the PSC noted. The company’s analysis concluded that the environmental regulations will not cause a significant increase in the demand for PRB coal and, thus, the minemouth price of PRB coal will remain steady.
The GenerationHub database gives these net summer capacities: Yates Unit 6 (352 MW); Yates Unit 7 (355 MW); and McIntosh Unit 1 (157 MW).
The conversion of Plant Gaston Units 1-4 from coal to natural gas was approved.
The PSC’s public interest staff did an analysis indicating that retirement of Gaston would be more economic than gas conversion, but this analysis reflected only a small difference in the economic results between retirement and gas conversion. Case parties agreed that it was reasonable for the commission to approve the conversion in order to maintain this capacity as protection against any unforeseen contingencies.
If gas prices remain low, it is possible that Plant Gaston may be dispatched before some of the surviving coal plants, the PSC noted. Public interest staff said that unexpected contingencies such as unexpected load growth or a delay in the return to service of the coal-fired Plant Bowen may support the continued operation of Plant Gaston.
U.S. Energy Information Administration data shows Gaston getting coal earlier this year from Alabama coal producers Walter Energy (North River longwall mine), Twin Pines Coal and Alabama Coal, plus coal from Colorado from the Elk Creek longwall mine of Oxbow Mining, and coal from Indiana from the Gibson deep mine of Alliance Coal. The plant once burned up to 4.5 million tons of coal per year.
Completion of the gas lateral and unit modifications for Gaston Units 1-4 is scheduled for 2015 to meet the MATS compliance timeline, though Georgia Power said in the IRP that an extension to the MATS compliance date may be required to ensure the units operate in compliance while on coal if the current gas conversion schedule cannot be met.
GenerationHub data shows that Gaston Unit 1-4 have a total of 1,020 MW of net summer capacity, with a coal-fired Unit 5 also at the plant and with 842 MW of net summer capacity. Gaston is located in Alabama and also supplies power to Alabama Power, which like Georgia Power is a unit of Southern Co. (NYSE: SO).
The change in the decertification date for Plant Branch Unit 1 from Dec. 31, 2013, to April 16, 2015, was approved.
In a prior case, the commission approved the decertification of Plant Branch Unit 1 to occur on Dec. 31, 2013. However, the company requested that the decertification date be postponed to April 16, 2015, to coincide with the retirement dates for Plant Branch Units 3 and 4 so that Plant Branch Unit 1 may be used to provide necessary startup steam for these other two units. The GenerationHub database puts the Unit 1 net summer capacity at 266 MW. The plant is also known as Harllee Branch.
Certain questions left open on Plant Bowen problems
Subsequent to the filing of this IRP, the company’s Plant Bowen Units 1-4 experienced a malfunction and subsequent explosion causing significant damage. Georgia Power was able to repair Units 3 and 4 and those units were brought back into service in May. Units 1 and 2 had not yet been brought back online as of the July 17 order.
The company will continue to keep the commission informed of all known costs associated with bringing Units 1 and 2 back online. In addition, prior to beginning any further environmental upgrade work as approved for MATS compliance, the company will provide an economic analysis providing that any decision to repair, upgrade, or continue to operate one or both units is economical. The company advised that they determined that repairing the units and returning them to service is the best economic option for customers.
The GenerationHub database gives these net summer capacities for the Bowen units: Unit 1 (724 MW); Unit 2 (724 MW); Unit 3 (892 MW); and Unit 4 (862 MW).