Century Aluminum readies for Wilson, Coleman coal plant shutdowns

Century Aluminum Sebree LLC on March 5 asked the Federal Energy Regulatory Commission for a break related to the imminent shutdown of the coal-fired Coleman and Wilson power plants of Big Rivers Electric.

Century wants a limited waiver of Resource Adequacy Requirements (RAR) found in Module E-1 of the Midcontinent Independent System Operator (MISO) Open Access Transmission, Energy and Operating Reserve Markets Tariff. Century requests this limited waiver in order to obtain Zonal Resource Credits (ZRCs) necessary to satisfy Big Rivers Electric’s Planning Reserve Margin Requirements (PRMR) with respect to Century’s Sebree Smelter load for the period of May 1 through May 31, 2014. Century said it has communicated and coordinated with Big Rivers and MISO regarding this waiver request.

Century asked for expedited consideration of this petition, with issuance of a commission order granting this petition no later than April 10.

A section of the MISO Tariff requires that market participants replace ZRCs from retiring generation resources with ZRCs from other resources within the same Local Reliability Zone (LRZ). But, the impending suspensions of Big Rivers’ Wilson and Coleman coal plants mean that an insufficient amount of ZRCs is available within Zone 6 to satisfy Big Rivers’ PRMR obligation for the entirety of the Sebree Load for May 2014.

“Given the critical need to satisfy this PRMR obligation to ensure adequate Planning Resources are available to meet Coincident Peak Demand requirements, Century respectfully requests that the Commission grant this petition to allow Century to purchase 251.5 MWs of non-Zone 6 ZRCs and issue an order to this effect no later than April 10, 2014,” Century wrote.

The requested waiver is related to a series of agreements by and among Big Rivers, Century, and Kenergy Corp. for continued service to Sebree in Robards, Ky., commencing on and after Feb. 1. The Century Transaction was approved in its entirety by the Kentucky Public Service Commission on Jan. 30.

“Century understands that Big Rivers’ Wilson unit will be suspended on or about April 1, 2014,” said Century. “Wilson is located in Zone 6 LRZ for purposes of MISO’s RAR process. Also, the current Coleman SSR Agreement is expected to end on May 1, 2014. Upon termination of the SSR Agreement, the operation of Coleman will be suspended at least through December 15, 2015 and, perhaps, indefinitely. During the 2013-2014 Planning Year, Big Rivers’ PRMR for LRZ Zone 6 attributable to the Sebree Load was 395 MW. The PRMR obligations incurred for the Sebree Load for the 2013-2014 Planning Year expire on May 31, 2014.”

Century and Big Rivers have attempted to locate and purchase other Zone 6 ZRCs to replace the ZRCs associated with Wilson for the Sebree Load, but they have not been able to purchase enough of them to fulfill the shortfall. However, Century has identified resources in other zones that have sufficient capacity available to satisfy the PRMR shortfall for the Sebree Load resulting from the Wilson retirement for the May 1-May 31, 2014 period.

MISO was able to work out early termination of Coleman support deal

MISO filed on Feb. 28 at the Federal Energy Regulatory Commission a request to terminate the System Support Resource (SSR) agreement for the coal-fired, 443-MW Coleman plant of Big Rivers Electric. The SSR provided for the continued availability of Big River’s Coleman Units 1-3 under MISO’s Open Access Transmission, Energy and Operating Reserve Markets Tariff. In November 2013, MISO submitted the SSR agreement to FERC, which the commission accepted on Dec. 30. The SSR was to extend to Sept 1 of this year.

“MISO has determined that Coleman is not required to serve in an SSR status past the sixty (60) days provided in MISO’s notice of termination, which releases Coleman from SSR designation on May 1, 2014,” said the Feb. 28 filing.

Big Rivers said in January that it plans to idle two coal-fired power plants due to the loss of power sales contracts with Century Aluminum. The cooperative said it would idle the one-unit 417-MW Wilson plant and the three-unit 443-MW Coleman plant.

U.S. Energy Information Administration data shows coal suppliers to Coleman last year included: the Onton #9 deep mine in western Kentucky of Alliance Resource Partners; the Highland operation in western Kentucky of Patriot Coal; and the Parkway operation in western Kentucky of Armstrong Coal.

The suppliers to Wilson last year included: the Paradise #9 deep mine in western Kentucky of coal operator Robert Murray’s KenAmerican Resources; the Shay #1 deep mine in Illinois of coal operator Chris Cline’s Foresight Energy (sales made through Foresight Coal Sales); and the Parkway operation in western Kentucky of Armstrong Coal.

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.