The Public Service Commission of Wisconsin sent out an Oct. 10 notice that it has initiated a review of a July 31 joint application from three utilities for $130m worth of upgrades at the coal-fired Columbia Energy Center Units 1 and 2.
Wisconsin Power and Light, Wisconsin Public Service and Madison Gas and Electric are seeking a Certificate of Authority to upgrade the coal pulverizers and steam turbines at Columbia Units 1 and 2. Any person desiring to become a party to the case has 14 days from the date of the Oct. 10 notice to tell the commission.
Various parties have already filed to intervene in the case, including the Wisconsin Industrial Energy Group and RENEW Wisconsin.
This upgrade project includes replacement coal pulverizers and a 95-MW plant uprate. The applicants jointly own Columbia, with WPL holding a 46.2% share, WPS holding a 31.8% share, and MGE owning a 22% share. WPL operates the facility.
“The Applicants have identified a combination of upgrades to the Units that will enable greater efficiencies from the existing units, accruing benefits to customers,” they told the commission. “Since the Columbia units were placed in operation, several advances in the design of turbine and pulverizer technology have occurred. Examples include advanced three dimensional modeling software, which allows for more efficient design, and finite element analysis software, which allows for the design of components such that they carry lower stress and are less susceptible to failure.”
The capital improvement project the utilities are proposing utilizes this newer technology to design and install new turbine components and replacement pulverizers. The primary benefits of the technology improvements are an estimated reduction in the heat rate of approximately 440 Btu per Kilowatt hour on each unit, and a total plant operating capacity increase of about 95 MW.
The heat rate reduction equates to about a 4% efficiency improvement on each unit, and the capacity increase equates to approximately a 9% increase in daily average energy production from each unit. With the efficiency and energy benefits, reduced by the capital and operating costs, the project is estimated to provide a net customer benefit of $103m in present value of revenue requirements (PVRR).
The alternative would be to address the pulverizer and turbine maintenance issues with a combination of repairs and replacement components. However, the alternative would utilize the same technology that was deployed when the units were placed in service in the 1970s, and would not include improvements to efficiency or energy production, the utilities noted.
The capital investment required for the project is estimated at $130m, but has a payback within approximately five years of the first full year of operation.
The applicants are proposing to complete the project by the second quarter of 2017 with material procurement beginning in the second quarter of 2014. The twelve coal pulverizer replacements are proposed for sequential installation beginning in the second quarter of 2015 and ending in the second quarter of 2017. The turbine upgrades are proposed for installation during major outages in first and second quarters of 2016 and the first and second quarters of 2017 for Unit 2 and Unit 1, respectively.
The Columbia Energy Center consists of two units – Units 1 and 2 – each of which is a tangentially-fired boiler and an associated turbine generator. The nameplate capacities for Units 1 and 2 are 512 MW and 511 MW, respectively.
U.S. Energy Information Administration data shows that Columbia earlier this year was taking Powder River Basin coal from suppliers like Arch Coal (NYSE: ACI), Cloud Peak Energy (NYSE: CLD) and Alpha Natural Resources (NYSE: ANR).