Xcel Energy (NYSE: XEL) said it is looking at about $600 million of scrubber installation costs at its coal-fired Tolk power plant if the U.S. Environmental Protection Agency follows through on a regional haze plan for Texas unveiled in December 2014 and due to be made final later this year.
In its December proposal, the EPA said it plans to disapprove the reasonable progress portions of the Texas State Implementation Plan (SIP) and instead adopt a Federal Implementation Plan. For Xcel’s Southwestern Public Service (SPS) subsidiary, the EPA proposed to require dry scrubbers on both Tolk units to reduce SO2 emissions to help achieve reasonable progress goals the EPA would establish for Texas and Oklahoma national parks and wilderness areas. The dry scrubbers would need to be installed and operating within five years of the EPA’s final action, currently expected in August 2015. SPS plans to file comments objecting to the installation of these dry scrubbers, said Xcel in its Feb. 20 annual Form 10-K report. If required, the dry scrubbers would cost approximately $600 million.
EPA is proposing use of Spray Dryer Absorber (SDA) technology at Tolk. EPA said in the December proposal that it evaluated the visibility benefits of installing scrubbers on Tolk units 171B and 172B, limiting its analysis to SDA, while looking at the relative benefits of SO2 controls on other Texas coal plants, as well. “The visibility benefits of SDA scrubbers on the Tolk units are projected to occur mainly at the Guadalupe Mountains,” the agency wrote. “We note that the deciview visibility benefits projected at the Guadalupe Mountains from controls on the Tolk units are smaller than those from scrubber upgrades at W. A. Parish or Welsh for impacts at the Wichita Mountains. However, when we evaluated other metrics, such as extinction benefit or percent of extinction benefits, we believe that the overall visibility benefit for installing scrubbers on the Tolk units was superior to either the W. A. Parish or the Welsh units. In particular, the Wichita Mountains has a much higher total extinction for the baseline and the 2018 projection than the Guadalupe Mountains, so the relative improvementin extinction levels is higher when the Tolk units are controlled for the Guadalupe Mountains, than if the W. A. Parish or the Welsh units were controlled for the Wichita Mountains. Therefore, considering all the visibility benefits relative to the respective Class I areas, we propose to find that the visibility benefits from installation of dry scrubbers on the Tolk units would be significant and beneficial towards the goal of meeting natural visibility conditions at Guadalupe Mountains.
“With the exception of Tolk, all of the scrubber retrofits were analyzed on the basis of both SDA and wet scrubbers. The SDA level of control was assumed to be a maximum of 95% not to go below 0.06 lbs/MMBtu. The wet FGD level of control was assumed to be a maximum of 98% not to go below 0.04 lbs/MMBtu. As we discuss in our Cost TSD, the cost-effectiveness ($/ton) of wet FGD was better than SDA in all cases except for the Tolk and Welsh units, which burn Powder River Basin (PRB) coal. However, even in those cases, the cost-effectiveness of wet FGD was only 0.5 to 0.8% greater than SDA. Given the greater visibility improvement of wet FGD over SDA, we propose to base our cost/benefit reasonable progress and long-term strategy determination on wet FGD, except for the Tolk units, due to their potential water issue.
“In comparison to the Big Brown units, the cost-effectiveness of the scrubber retrofits for the Monticello, Coleto Creek, and Tolk units are less, although still well within the range that we have found acceptable for BART. Also, in comparison to the Big Brown units, the visibility improvements projected to occur due to the installation of the scrubber retrofits are less. For instance, as we discuss above in Section VII.H, the visibility benefits of SDA scrubbers on the Tolk units are projected to occur mainly at the Guadalupe Mountains. Those visibility benefits are smaller than the visibility benefits at Wichita Mountains from scrubber upgrades at W. A. Parish or Welsh, which we are not proposing to control. However, when we evaluated other metrics, such as extinction benefit or percent of extinction benefits, we concluded that the overall visibility benefit for installing scrubbers on the Tolk units was superior to either the W. A. Parish or the Welsh units. Thus, we consider these visibility benefits to be significant. Consequently, we propose that the Monticello, Coleto Creek, and Tolk units meet SO2 emission limits corresponding to this evaluation. Our proposed SO2 emission limits for these units are shown in Table 38. In recognition of their lesser cost/benefit ratio, we are specifically soliciting comments on the appropriateness of one or more of these scrubber retrofits.”
Tolk is a 1,067-MW plant made up of Unit 1 (532 MW) and Unit 2 (535 MW). Air emissions are currently controlled with the use of low-sulfur coal and baghouses.