Power groups oppose MISO’s support for Edwards coal unit

The Illinois Municipal Electric Agency (IMEA) and Wabash Valley Power Association (WVPA) told the Federal Energy Regulatory Commission on Aug. 13 that there should be a hearing held before a short-term life extension is granted for the coal-fired Edwards Unit 1 in Illinois.

The two were responding to arguments from AmerenEnergy Resources Generating and Ameren Energy Marketing. These proceedings involve certain payments, referred to as “SSR” payments, to be made by the Midcontinent Independent System Operator (MISO) to Ameren Energy Marketing (AEM), effective Jan. 1, 2013, for certain operating costs incurred in the operation of the Edwards Unit 1 owned by Ameren Energy Resources (AERG). The SSR deal allows the unit extra life, beyond a planned retirement date from Ameren, so MISO can make grid upgrades needed prior to that unit shutdown.

The commission should reject Ameren’s “limited protest” or, if it accepts that protest, then set the matters raised thereby for a full evidentiary hearing, said IMEA and WVPA. The commission should not allow any SSR payments for Edwards 1 to go into effect until after a full evidentiary hearing, they added. Neither Ameren nor MISO has demonstrated that the terms that they separately propose for the SSR agreement supporting their respective cost claims are just and reasonable, they said.

On July 5, Ameren filed a preemptive complaint under Federal Power Act Section 206 with the commission against MISO regarding the compensation that a System Support Resource (SSR) agreement should provide under MISO’s tariff. Less than one week later, and pursuant to Section 205 of the Federal Power Act, MISO submitted to the commission for approval an unexecuted version of the same SSR agreement at issue in the Section 206 action initiated by Ameren.

MISO also filed an allocation of SSR costs that are associated with the operation of Edwards 1 coupled with a request for waiver to permit the agreement and associated payments to be effective Jan. 1, 2013. At issue in all three proceedings are the specific terms by which the SSR agreement will govern the continued operation of Edwards 1, and, in particular, the costs to be recovered by Ameren for that operation.

On July 31, IMEA and WVPA filed their joint protest. In doing so they: opposed the costs claimed by MISO for operating Edwards 1; urged the summary dismissal of the Ameren complaint on the ground that Ameren “has provided absolutely no support whatsoever as to how its claimed costs were calculated much less why they should be allowed”; and opposed as wholly unjustified MISO’s request for a waiver of the commission’s prior notice requirement to permit a retroactive effective date.

Subsequently, Ameren filed its “limited protest” focusing on the allowable SSR compensation for the continued operation of Edwards 1. In that protest Ameren argues that: an SSR agreement is appropriate for Edwards 1; the effective date should be Jan. 1, 2013; and MISO has accurately calculated the “fixed incremental going-forward costs for Edwards 1.” Additionally, Ameren goes on to repeat the argument made in its Section 206 complaint that the SSR compensation “should include a return on capital investment in existing plant, depreciation expense and associated income taxes,” IMEA and WVPA said.

Ameren’s “limited protest” should be rejected as it is nothing more than a transparent attempt to bolster Ameren’s previous Section 206 complaint with evidence that should have been supplied when Ameren filed that complaint, IMEA and WVPA said.

MISO has said its level of SSR support for this unit is proper

MISO told the Federal Energy Regulatory Commission on July 25 that it provided a proper level of compensation for the short-term operation of Edwards Unit 1 while needed grid support improvements are made.

Edwards Unit 1 is a 90-MW coal-fired boiler located in Bartonville, Ill. In August 2011, Ameren submitted a notice to MISO to suspend operation of Edwards 1 as of Feb. 6, 2012, for a period of 36 months. In December 2012, Ameren submitted a revised notice to MISO to retire Edwards 1, effective Dec. 31, 2012.

In December 2012, MISO notified Ameren of the SSR status of Edwards 1. “MISO’s notification to Complainant stated that Edwards 1 would be designated an SSR Unit until such time as appropriate alternatives could be implemented to mitigate reliability issues,” said MISO in its July 25 answer. “The analysis concluded that the proposed retirement of Edwards 1 would result in violations of specific applicable Ameren Transmission Company planning criteria during the summer and shoulder peak load periods until the completion of transmission reinforcements that include the 345kV Maple Ridge-Fargo line and Maple Ridge Substation. As a result, MISO designated Edwards 1 as an SSR Unit until such time as appropriate alternatives could be implemented to mitigate reliability issues.”

MISO on July 11, within the unexecuted SSR, submitted to the FERC what is in essence a retirement schedule for Edwards Unit 1. A planned transmission upgrade that, after completion, would enable Edwards 1 to retire is proposed in the MISO Transmission Expansion Plan 13, subject to approval by the MISO Board of Directors in December 2013. The completion of this transmission upgrade will resolve the need for Edwards 1 to be designated as an SSR unit. Until this alternative solution is completed, however, Edwards 1 will be required for system reliability, and the SSR agreement is necessary to ensure continued system reliability.

Although MISO expects that the Edwards 1 will continue as an SSR unit until the Maple Ridge–Fargo 345-kV transmission project is completed in December 2016, other alternatives will be sought in considering the annual renewal of the SSR agreement.

MISO currently believes that the subject SSR agreement may be required for at least the twelve-month term ending Dec. 31, 2013, and it anticipates entering into a subsequent SSR agreement with Ameren for the period from Jan. 1, 2014, until the completion of the Maple Ridge–Fargo 345-kV project in December 2016.

The Edwards plant began commercial operation in 1960 with Unit 1. Edwards Unit 2 (240 MW net) began commercial operation in 1968, while Unit 3 (315 MW net) began commercial operation in 1972. Units 2 and 3 are not involved in this retirement deal.

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.