Appalachian Power nears likely okay of Clinch River conversion

A hearing examiner at the Virginia State Corporation Commission on Nov. 14 issued a report advising that the commission approve Appalachian Power’s application for coal-to-gas conversions of Unit 1 and 2 at the Clinch River power plant.

On May 29, the company filed with the commission an application for certificates of public convenience and necessity (CPCNs) to convert the fuel for Units 1 and 2 of the Clinch River plant from coal to natural gas. The company requested approval of the project by Feb. 1, 2014, to meet its expected load by 2016 and beyond.

Appalachian Power, a unit of American Electric Power (NYSE: AEP), noted that it plans to retire 1,245 MW of coal-fired generation in response to upcoming environmental requirements. It also indicated that APCo considered adding environmental controls to its Kanawha River and Sporn coal facilities as an alternative to the project but found that this was not economical. The company considered the conversion of other sub-critical pulverized coal facilities to natural gas but ultimately found the Clinch River site to be best suited for gas generation. The company worked out a stipulated deal with parties to the case.

“Based upon the evidence presented, including the Stipulation, I find the Company sustained its burden of proving the Project will have no material adverse effect upon the reliability of electric service, is required by the public convenience and necessity, and is not otherwise contrary to the public interest,” said the Nov. 14 report from Hearing Examiner A. Ann Berkebile. “Specifically, the evidence supports the conclusion that the Conversions represent the least cost alternative for meeting APCo’s capacity needs.”

“I also find that the Project will have a positive impact on Virginia’s economy by facilitating reliable electric service at an economical cost, by preserving existing jobs at the Clinch River facility, and by generating new jobs associated with the Project’s construction. Moreover, I note that no participant in this case has opposed the approval of the Project. Although the Environmental Respondents suggest that the Company may be able to meet its need for additional capacity through increased energy efficiency and demand-side management, they also strongly support the Conversions and the retirement of Clinch River Unit 3.”

The conversions are expected to cost $64.8m (excluding any gas pipeline costs).

Clinch River is located in Russell County, Va., and began commercial operation in 1958 with the completion of Units 1 and 2. Unit 3 was added in 1961. The plant has a total nominal net capacity of 705 MW. The units are not equipped with needed emissions controls, so APCo plans to convert Units 1 and 2 to use natural gas and to retire Unit 3. Upon conversion to gas firing, Units 1 and 2 are expected to each have a nominal capacity of 242 MW, for a total capacity of 484 MW.

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.