The Kansas City Board of Public Utilities on Sept. 3 filed with the Federal Energy Regulatory Commission a copy of a recent offer it made to EPA to curtail operation at its coal-fired Nearman Unit 1 in exchange for a Mercury and Air Toxics Standards (MATS) deadline extension.
In response to MATS, the Board of Public Utilities (BPU) said it has received approval and financing for the transition of Quindaro Units 1 and 2 from coal and/or natural gas operation to exclusively natural gas operation on or around April 16, 2015, which is the initial MATS compliance deadline, and to upgrade Nearman 1 with a $250m air quality control project (“AQC Project”). This project will include a selective catalytic reduction system, an ammonia (urea) handling system, a circulating dry scrubber system, a pebble (hydrated) lime handling system, a byproducts handling system, a powdered activated carbon system, and a pulse jet fabric filter.
The new controls are not expected to be ready for tie in with Nearman 1 until approximately October 2016 with the controls expected to become operational sometime in the late winter-early spring of 2017.
Two aspects of BPU’s service area are pertinent to this request for an extended Nearman Unit 1 compliance deadline.
- First, a filing made at the Federal Energy Regulatory Commission by the Southwest Power Pool (SPP) identified the Kansas City Area as a Frequently Constrained Area (FCA). Within this FCA, BPU has a separately constrained area served by a 69-kV transmission line that affects approximately half its residential and commercial load. Within BPU’s constrained area, imports of even minimal amounts of power increase dramatically the risk of overload, and possible blackouts. Attached to the Sept. 3 filing with FERC is an October 2013 report from Potomac Economics about the constraint situation.
- Second, BPU serves an area where many of its customers face serious economic challenges: median income in Wyandotte County is nearly 25% lower than state-wide median income, with a little more than 23% of Wyandotte County residents living below the poverty level as compared to a little more 12% of state residents living at that level.
Board requests six-month extension of already extended deadline
For the period from April 16, 2016, to Oct. 15, 2016, BPU requests an extension of the MATS compliance deadline based on the principles announced in an EPA Policy Memo. In addition, BPU said it would agree in writing not to supply for the period from April 16, 2016, until the earlier of April 16, 2017, or the date on which the Nearman 1 AQC Project becomes operational, more than one-third of the potential annual output of Nearman 1 to the grid.
Nearman 1’s yearly net output is 1,870 GWh (based on 30% design net electric output efficiency and its permitted maximum rate heat input of 2433.1 MMBtu/hr). Under the one-third sales criterion, BPU would agree not to supply more than 623 GWh from Nearman 1 during the period. Based on a five-year average, Nearman 1 supplies about 852 GWh of electricity during BPU’s summer heating period (roughly April to October). Thus, the agreement to supply no more than 623 GWh is substantially less than Nearman’s normal summer base load, meaning Nearman 1 would be limited to supplying load when demand is highest during the 2016 summer peak season.
BPU said it has previously been granted a one-year extension from the Kansas Department of Health and Environment of the April 16, 2015, MATS initial deadline. This request to EPA would extend the MATS compliance deadline for another six months through BPU’s 2016 summer peak season, and is warranted because the loss of Nearman 1 capability during the summer peak season would enhance the potential for possible reliability issues on BPU’s system and would confront BPU’s retail customers with additional costs that they can ill afford to pay, BPU said.
“Without the limited extension, BPU has no viable option but to shut down Nearman 1 for the 2016 summer peak season, and seek replacement energy from other sources,” said the offer to EPA. “Granting this limited extension request would provide a degree of certainty for BPU’s customers by allowing Nearman 1 to operate as a peaking unit that would safeguard reliability on BPU’s system at a known cost that is affordable to its retail customers.”
Nearman Station consists of a 256-MW, coal-fired unit Unit 1, and a 75-MW simple-cycle combustion turbine gas/oil peaking unit. Quindaro Station consists of: Unit 1, a 78-MW coal-fired facility: Unit 2, a 144-MW coal-fired unit; and CT2 (52.4 MW) and CT3 (52.4 MW), which are simple-cycle combustion turbine gas/oil peaking units.