Groups protest MISO life-support deal for Coleman coal plant

The Sustainable FERC Project and Earthjustice on Nov. 22 jointly objected at the Federal Energy Regulatory Commission to a Midcontinent ISO plan to keep the coal-fired Coleman plant of Big Rivers Electric in operation for a year under a System Support Resource (SSR) agreement.

The SSR is designed to funnel money from MISO to the Kentucky-based cooperative to keep Coleman going while grid fixes are made to compensate for the loss of that plant. Big Rivers Electric has planned to idle the plant due to the loss of aluminum smelter load on its system while it tries to work out new power sales agreements for this capacity.

The two groups objected to the SSR for Coleman Units No. 1-3 because:

  • even though a demand response (DR) alternative expected to be available in May 2014 will eliminate the need for the agreement, MISO’s proposed term for the agreement is one year, through Sept. 1, 2014;
  • the record is silent as to whether MISO considered DR or other solutions beyond the single alternative MISO addresses in the Attachment Y Study Report;
  • MISO has not justified the capital cost items to be reimbursed under the SSR agreement; and
  • MISO’s filing is ambiguous as to which Coleman units may be removed from the SSR agreement before the end of the one-year term.

The proposed agreement therefore will result in unjust and unreasonable rates under the Federal Power Act, and the groups requested that the commission reject MISO’s proposed Rate Schedule 43f and agreement for the three Coleman units.

Earlier this year, Big Rivers Electric informed MISO through an Attachment Y notice that it wanted to suspend operation of Coleman for 28 months, from Sept. 1, 2013, through Jan. 1, 2016. MISO studied the request and concluded that suspension of the Coleman plant could cause reliability issues, and therefore negotiated a proposed SSR agreement.

According to the Attachment Y Study Report, MISO found that a nearby aluminum smelter, owned by Century Aluminum in Hawesville, Ky., could significantly mitigate the reliability impacts from Coleman’s suspension by voluntarily reducing load. The smelter’s peak load is 485 MW. MISO found that, depending on system conditions, reducing the smelter’s peak load to between 338 MW and 138 MW would eliminate the potential reliability issues caused by the mothballing of the plant and “adequately address the transmission system overloads.”

MISO filed an updated SSR agreement on Nov. 1 with FERC. Big Rivers owns the Coleman facilities located near Hawesville, Ky., in the northern portion of that state. These facilities include four generating units, the first three of which provide 443 MW of capacity that are the subject of the SSR. Coleman has coal-fired steam boilers that were installed in the 1969-1971 period.

Century Aluminum of Kentucky GP, which would pay almost all SSR costs, filed on Nov. 22 a brief with FERC supporting the SSR overall. However, it opposes certain aspects of the Nov. 1 SSR filing, and urges the commission to accept the SSR agreement only if the SSR agreement is subject to the conditions set forth in its protest. Century will be directly responsible for 99.5% of all Coleman SSR costs (potentially more than $3m per month).

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.