The Minnesota Public Utilities Commission at its Sept. 25 meeting will be looking at the status of compliance at six coal-fired power units in the state with the Minnesota Mercury Emissions Reduction Act (MERA) of 2006.
The MERA requires public utilities to file plans to reduce mercury emissions at coal-fired electric plants located in Minnesota with a generating capacity in excess of 500 MW. Six units are affected by MERA and compliance has been pretty well settled at five of them, said commission staff in a Sept. 18 pre-meeting briefing memo.
The sixth unit is Minnesota Power’s Boswell Energy Center Unit 4, where the company does plan to install new emissions controls. Staff said the commission’s questions on plans for this unit are:
- Should the commission accept Minnesota Power’s filings in dockets covering the emissions controls and close the dockets?
- Should the commission approve Minnesota Power’s mercury emission reduction plan for Boswell Energy Center Unit 4?
- Should the commission, in consultation with the state Pollution Control Agency, order Minnesota Power to implement the most stringent mercury-control alternative proposed by the utility under the statute?
- Should the commission approve Minnesota Power’s Boswell 4 Environmental Improvement Rider?
The six MERA-affected generating units are:
- Xcel Energy’s Sherburne County Units 1-3 and the Allen S. King plant; and
- Minnesota Power’s Boswell Energy Center Units 3 and 4.
Since 2007, the commission has previously approved mercury reduction plans for five of the six covered plants. In 2010, the statute was modified to allow Minnesota Power until Dec. 31, 2015, to file a plan for Boswell Unit 4, and to implement an approved plan by Dec. 31, 2018. Prior to this change, the filing for Boswell 4 (BEC4) would have been due July 1, 2011, for implementation by Dec. 31, 2014.
BEC4 is a 635 MW coal-fired unit with 585 MW net operating capability located in Cohasset, Minn. BEC4 is jointly owned by Minnesota Power (MP) and WPPI Energy with WPPI owning a 20% interest. Minnesota Power proposed environmental retrofits aimed at reducing mercury (Hg), particulate matter (PM), and SO2. The company has proposed to add a circulating dry scrubber, fabric filter and powdered activated carbon injection system to remove Hg, SO2, and PM.
MP said that when it began operation in 1980, BEC4 operated with first-generation low NOx burners and wet sprayer system. Additional NOx controls were installed in 2008. Currently, the company has a wet scrubber for SO2 control. MP has now proposed to install a circulating dry scrubber, and a powdered activated carbon injection system with fabric filter. This is expected to reduce mercury emissions by 89%, particulate matter emissions by 80%, and SO2 by 39%.
The company plans to begin construction in mid-2013 with in-service expected by year-end 2015, the memo noted. Due to the number of projected generation outages anticipated to occur in the next several years to meet compliance deadlines of the U.S. Environmental Protection Agency under the Mercury and Air Toxics Standards (MATS), MP stated that it has proactively requested an outage to complete the circulating dry scrubber (CDS) transition for October-November 2015.
Gas-fired alternatives to Boswell Unit 4 were looked at
Commission staff noted that an alternative option looked at would implement a temporary unit shutdown of BEC4 until 2020 and involve building a 213-MW natural gas combustion turbine in the interim to help with replacement power needs. “MP stated that there is no indication of a delay or dissolution of the MATS Rule and this option would ultimately create a significant reliance on the regional market for replacement power purchases, at levels of almost 30 percent of expected energy supply requirements (much higher than typical market utilization of 15-20 percent),” the memo pointed out. “Minnesota Power stated that it does not believe the level of market volatility introduced by this option is a sound choice for customers.”
Another option looked at was to shut BEC4 permanently. This option would allow another reasonable generating resource option to replace BEC4 in 2016. The retirement of BEC4 would include associated closure costs such as the remaining plant balance of this large facility and the construction of new generating resource(s). Minnesota Power stated that it screened a wide range of replacement alternatives to determine reasonable resource options to compare with retaining BEC4 and executing the proposed Retrofit Project. The lowest cost alternatives included several natural gas generating resource options. Minnesota Power identified two natural gas alternatives to consider as part of its evaluation of the BEC4 Project’s cost effectiveness:
- The first option, “direct” replacement, would implement a 1×1 combined cycle (approximately 400 MW) unit, plus a small bank of reciprocating engines (55 MW) in combination with wholesale market purchases (20 MW).
- The second option, “Ownership Share” replacement, would procure an approximate 60% share of a larger 2×1 combined cycle unit (typically 800 MW) to replace BEC4. By considering this option, Minnesota Power ensured that it considered the lowest cost natural gas technology, as a combined cycle unit is a more efficient generating station and, in a larger size, can offer lower cost energy on a per megawatt-hour basis. Deploying this replacement option assumes Minnesota Power can find a counterparty to invest in the remaining share of the 800 MW unit in the same timeframe.
Pace Global Inc. was enlisted to provide an independent review of the alternatives for meeting environmental compliance at BEC4. Pace Global’s analysis confirmed that pursuing an environmental retrofit at BEC4 and completing it by 2016 was in the best interest of Minnesota Power’s customers over a significant range of plausible industry futures, the staff memo pointed out.