Otter Tail Power is seeking cost recovery at the Minnesota Public Utilities Commission through an Environmental Upgrades Cost Recovery Rider (ECR Rider) for an ongoing emissions control project at the coal-fired Big Stone power plant in South Dakota.
The ECR Rider will allow Otter Tail rate recovery for its share of costs for the Air Quality Control System (AQCS) project being installed at Big Stone. The Big Stone plant is a multiple-owner plant that Otter Tail owns with Montana Dakota Utilities and NorthWestern Energy. Otter Tail owns 53.9% of the plant.
The AQCS equipment has been approved as the Best Available Retrofit Technology (BART) under the U.S. Environmental Protection Agency’s Regional Haze Rules and the project received an Advance Determination of Prudence (ADP) from the commission in a January 2012 order, said Otter Tail in a July 31 application for the ECR Rider.
The AQCS project includes the installation of a dry scrubber for SO2 reduction, and selective catalytic reduction (SCR) for NOx reduction. The project also includes a new baghouse because the existing baghouse was built with an operating pressure that’s much lower than new the air-quality control system will require.
Mercury reduction is not required to meet BART guidelines, but the dry scrubber and baghouse make a good combination for mercury reduction, the utility noted. By adding halogenated activated carbon to the flue gas, mercury emissions will be significantly reduced. Therefore, the AQCS project also includes an activated carbon injection (ACI) system. The project is scheduled to be completed and in service late in 2015.
Plant owners able to make major cuts in project costs
The Big Stone boiler was originally designed to burn lignite coal and began operation in 1975. Designed by Babcock & Wilcox, the boiler is a Caroline type balanced-draft pump-assisted radiant machine. In 1995, the boiler was converted to burn Powder River Basin (PRB) coal. With the conversion to PRB coal fuel, a simplified Separated Overfire Air (SOFA) system was installed to reduce nitrogen NOX emissions. The boiler also has a flue gas recirculation (FGR) system to control main steam and reheat temperatures. The unit currently has a conventional pulse-jet fabric filter for control of particulate emissions that will be replaced as part of this project. Ash is currently sent to a fly ash storage silo located directly south of the plant, where it is then trucked to a landfill.
At the time of the ADP proceeding, the estimated capital cost of the AQCS project was $491m (inclusive of $40m for a new baghouse and $2.1m for the ACI system, which are excluded from the ECR Rider). Since the ADP was approved, the projected costs of the project have been reduced by $86m (17.5%). Design and engineering modifications account for about 45% of the cost reductions (for example, changes to the design of boiler modifications eliminated costs associated with major plant structural changes). The project delivery method, timing and market conditions account for about 35% of the cost reduction.
Otter Tail noted that it has taken on the duties of construction management for the project, which accounts for approximately 13% of the cost reduction. Also, as a consequence of the reduction in overall project costs the contingency amount for the project is also reduced; this reduction accounts for about 7% of the budget reduction. Reflecting these reductions to estimated project costs, the total cost estimate for the AQCS project is now $405m (2015 dollars).