East Kentucky Power to add a year of life to two Dale coal units

At the request of PJM Interconnection, East Kentucky Power Cooperative has decided to extend, pending regulatory approval, by one year its timeline for shutting the coal-fired Units 3 and 4 at its Dale power plant.

EKPC on Dec. 18 filed with the Kentucky Public Service Commission an update within a case it lodged in September for permission to build a coal ash landfill at its J.K. Smith coal plant that will take ash from Dale, which is due for retirement due to federal Mercury and Air Toxics Standards (MATS) compliance needs.

“Since the filing of its Application, EKPC has held numerous, extensive discussions with the regional transmission organization of which it is a member, namely PJM Interconnection, LLC (‘PJM’),” said the update. “During these discussions, PJM has expressed concern regarding near-term generation capacity and the adequacy of available resources to maintain the reliability of the high voltage electricity grid that PJM operates. PJM’s most pressing concern relates to its 2015/2016 Delivery Year, during which it projects a significant decrease in the amount of available generation due to retirements associated with MATS and/or general economic conditions.

“In an effort to address the anticipated decline in available generation resources, PJM has requested that EKPC alter its plan to place Dale Station Units 3 and 4 in indefinite storage as of April 2015. In particular, PJM has requested that EKPC seek from the Kentucky Department for Air Quality (‘DAQ’) a one-year extension of the deadline for compliance with MATS with respect to Dale Station Units 3 and 4. PJM believes that having Dale Station Units 3 and 4 available during the 2015/2016 Delivery Year, and specifically during the winter of 2015/2016, will help ensure resource adequacy and promote reliable operations. After consultation with PJM, and in light of its own analysis, EKPC has decided that it is willing to assist PJM and thus seek from the DAQ a one-year extension of the deadline for MATS compliance with respect to Dale Station Units 3 and 4. This action, if successful, will enhance the reliability of the electric grid operated by PJM with little to no financial risk borne by EKPC. Additionally, having Dale Station Units 3 and 4 operational through the 2015/2016 Delivery Year will allow them to remain available to collect revenues from PJM’s capacity market during that timeframe.”

Dale Units 1 and 2 were shut earlier this year and will stay shut

Don Mosier, Executive Vice President and Chief Operating Officer of EKPC, said in accompanying testimony that EKPC’s Dale Station is home to four units comprised of pulverized coal-fired boilers with steam turbine generators. Units 1 and 2, each rated at 25 MW, were commissioned in 1954. Dale Station Units 3 and 4, each rated at 75 MW, were commissioned in 1957 and 1960, respectively.

Mosier added: “In April of 2014, EKPC made the decision to close Dale Station Units 1 and 2 and begin exploring the marketing of the assets. Nothing has changed with respect to the operational status of Dale Station Units 1 and 2, and those assets are not at issue in this supplemental testimony. Due to the costs of operating Dale Units 3 and 4, EKPC does not anticipate that PJM will actually dispatch the units a significant amount during the pertinent timeframe. Even if Dale Units 3 and 4 are dispatched to a greater extent than projected, however, the expected incremental increase in coal ash produced is minimal.”

Dec. 16 letters, one from EKPC and one from PJM, to the DAQ requesting the one-year extension for Units 3 and 4 are attached to the Dec. 18 testimony.

Said the PJM letter: “In particular, for the 2015/2016 Delivery Year, there will be 8,359 MW less generation than there is today, and in the following Delivery Year for 2016/2017 new entry will shrink this net decline in generation resources to less than 3,500 MW. This lower reserve margin has a significant impact on the 2015/2016 winter loss of load risk .PJM studies indicate a pronounced risk of loss of load in winter 2015/2016 if Polar Vortex conditions occurred and outage rates were as high as PJM experienced in January 2014 — 15% over and above the expected 7% forced outage rate. PJM would almost certainly experience a loss of load event under such conditions. Figure 3 shows the various forced outage rates, over and above the expected 7% forced outage rate, that could occur during Polar Vortex-like conditions. This figure shows that if the actual forced outage rate were 13% above the expected 7% forced outage rate, there would be a 95% chance of experiencing a loss of load event (that equates to an outage rate 2% below what PJM experienced on January 7, 2014). Operating procedures for a general resource adequacy shortfall would be to shed load based on a pro rata share across the RTO, and so it is impossible to say where, specifically on the system, loss of load may occur.”

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.