Naughton 3 status as coal unit up in the air right now, says PacifiCorp

The conversion of the coal-fired Naughton Unit 3 in Wyoming to natural gas may be delayed from the end of 2014, to a new date at the end of 2017, said PacifiCorp in March 3 rate case testimony filed at the Wyoming Public Service Commission.

Chad Teply, Vice President of Resource Development and Construction for PacifiCorp Energy, said the Naughton Unit 3 natural gas conversion project is being pursued as the least cost compliance alternative to the state of Wyoming Regional Haze State Implementation Plan (SIP) requirements for the unit. The natural gas conversion project was identified as the least cost alternative to installing selective catalytic reduction (SCR) and baghouse on Naughton Unit 3. The U.S. Environmental Protection Agency took final action with respect to the Wyoming Regional Haze SIP requirements for Naughton Unit 3 on Jan. 30.

“In its final action, the EPA specifically states its support of the gas conversion of Naughton 3, noting, however, that because the SIP documentation did not include a gas conversion option, EPA could not consider that option until the SIP could be changed,” Teply wrote. “As such, PacifiCorp is currently working with the State of Wyoming Division of Air Quality to identify amendments necessary to SIP related documentation to support the Naughton Unit 3 gas conversion by June 30, 2018. Until the underlying state of Wyoming compliance obligations, including the Wyoming Regional Haze SIP, are modified,  and EPA takes final action on the SIP, the Company remains obligated to comply the Wyoming Regional Haze SIP and the associated WDEQ permit requirements to install SCR and a baghouse at Naughton Unit 3 by December 31, 2014.”

Teply didn’t say what would happen with the unit between the end of 2014, and June 2018. He noted that the company has an air permit from Wyoming regulators that allows coal operation of Naughton Unit 3 to end by Dec. 31, 2017, and to convert the unit to natural gas by June 30, 2018. He said that his testimony includes the worst-case scenario that Unit 3 ends its use of coal at the end of 2014, and comes back on gas in June 2015. If EPA allows the unit to operate as a coal-fueled resource through Dec. 31, 2017, the company will revise its natural gas conversion project implementation schedule accordingly.

A PacifiCorp spokesman was unable on March 13 to provide an update on the Naughton Unit 3 conversion timetable.

Naughton consists of three coal-fueled units. The Naughton plant property is adjacent to Westmoreland Coal’s Kemmerer strip mine, which supplies approximately 2.8 million tons per year of sub-bituminous coal to the plant via an overland belt conveyor. Naughton Unit 3 began commercial operation in 1971. It has a currently approved depreciable life for ratemaking purposes of 2029, and a net reliable generation capacity of 330 MW.

Teply noted other emissions control projects for several coal units systemwide primarily result in the reduction of NOx, particulate matter, SO2 and mercury emissions. The projects include a baghouse conversion and low NOx burners installation at Hunter Unit 1 in Utah, and an SCR system installation for NOx control at Hayden Unit 1 in Colorado.

Solicitation for Dave Johnston plant coal needs is imminent

Cindy Crane, Vice President, Interwest Mining Co. and Fuel Resources for PacifiCorp Energy, provided some heavily redacted testimony. Highlights in the public record include, with the test period mentioned being July 2014-June 2015:

  • The Dave Johnston plant in Wyoming is projected to consume approximately 3.6 million tons during the test period. The company currently has 2.5 million tons of coal for the plant under contract. The company intends to solicit multi-year coal supplies from Powder River Basin mines during the second quarter of 2014.
  • The current rail agreement with the BNSF Railway for the Dave Johnston plant, executed  in January 1998, expired Dec. 31, 2013. In November 2013, the company negotiated a new multi-year transportation agreement for the Dave Johnston plant effective January 2014. The new contract extends through 2017 with a reduction in the annual contract minimum from the current 3.5 million tons to 3.0 million tons.
  • Following a March 2013 request for proposal for Powder River Basin coal supplies for Dave Johnston, the company executed a three year coal supply agreement for the purchase of Dry Fork mine coal from the Western Fuels Assn. through 2016. Approximately 34% of the test period requirements will be supplied by the new Dry Fork agreement. About 36% of the test period requirements are supplied collectively by the Cordero mine as a result of an April 2012 solicitation and the Coal Creek mine under an April 2011 RFP solicitation. Both the Cordero and Coal Creek supply arrangements expire in December 2014. The company intends to solicit additional coal supplies during the second quarter of 2014 for the remaining 30%, or 1.1 million ton open position.
  • In February 2013, Wyodak Resources Development presented the company with a multi-year coal quality projection. Wyodak Resources actively mines two seams with significantly different sulfur content. The Wyodak plant will be entirely supplied by the “top seam,” the higher sulfur seam, during the test period; during the base period the plant was supplied with coal from both seams. That leads to an increase for the test period in sulfur content of the delivered coal.
  • Test period production at the company’s Deer Creek longwall mine in Utah declined by approximately 420,000 tons. Deer Creek coal is consumed by the Hunter and Huntington plants; both plants share a maximum ash target of 15%. The longwall system is projected to encounter elevated ash levels during August-September 2014, November-December 2014 and again in March-June 2015 period, and elevated sulfur content during the August 2014-September 2014 period. During periods of high ash coal production, the longwall system will be operating a single ten-hour shift instead of two 10-hour shifts.
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.