The DTE Electric unit of DTE Energy (NYSE: DTE) is looking at the merits of shutting, repowering or retrofitting two coal-fired units at its River Rouge power plant by April 2016.
DTE Electric outlined some resource planning details in an April 1 filing at the Michigan Public Service Commission. The commission had asked various utilities serving customers in the state to report on their capacity situations for the 2014-2016 period, considering the likely retirement of a significant amount of mostly coal-fired capacity in and around the state during that time due to new federal air regulations.
Although DTE Electric said it currently expects to have a total of 10,312 MW of Planning Resources in planning year 2016 (PY2016), this could potentially be lower if it decides to retire (or repower at a lower capacity) its River Rouge Units 2 and 3 ahead of the extended Mercury and Air Toxic Standards (MATS) implementation date of April 16, 2016. The initial MATS compliance date is in April 2015, but state agencies can grant a one-year extension.
“The Company is currently evaluating a number of potential options for the River Rouge Power Plant including, but not limited to, retrofitting with environmental controls to allow for continued coal-fired operation, repowering to natural gas-fired operation, and retirement,” the company added.
The GenerationHub database shows Unit 2 (251 MW summer net capacity) and Unit 3 (276 MW summer net) at River Rouge as the only coal-fired units at the plant. The plant has other oil- and gas-fired capacity.
DTE Electric noted that in the most recent Organization of MISO States (OMS) / MISO report titled “OMS/MISO Resource Adequacy Survey Update” dated Jan. 31, the Midcontinent ISO points out that its Central & North Regions are expected to have a 2 GW shortfall in 2016 Resource Requirement. Zone 7 (Michigan excluding the Upper Peninsula), where DTE Electric’s Detroit-centric service territory is located, is expected to have a 3.1 GW shortfall in 2016 Resource Requirement. Resource Requirement is the total installed capacity that is needed to meet regional peak demand and required reserve margins.
As indicated in the “Resource Adequacy Potential Solutions” presentation in the Common Issues Meeting on March 20, MISO is conducting studies to identify solutions to increase Planning Resource availability for PY2016. The first study is to identify potential transmission solutions to increase the physical transfer capability from MISO South to Central & North regions. Final recommendations are expected to be made by November 2014. The second study is to identify potential mitigation plans for unlocking unused generation in the MISO North & Central regions. This study is to identify solutions to convert currently ineligible generation capacity to eligible capacity for planning resources in the annual Planning Resource Auction in 2016. Engineering Design and Final Recommendations are expected to be made by September 2014, DTE Electric noted.
DTE is evaluating the acquisition of planning resources through a single- or multi-stage capacity procurement process that includes a capacity auction focusing on short-term capacity supply, likely for PY2015 to PY2017, and a Request for Proposals (RFP) for long-term capacity, including but not limited to existing generating sources, long-term contracts, and/or new generating sources. In addition to evaluating the potential acquisition of capacity through the procurement process, the company said it may decide to acquire additional capacity from the MISO annual Planning Resource Auction for PY2015 and PY2016.