Plans to build new coal handling facilities that will allow new supplies of Powder River Basin coal at the Elm Road Generating Station (ERGS) are justified based in part on the costs of burning that cheaper coal, said a Wisconsin Electric Power official.
Wisconsin Electric Power, Madison Gas and Electric and WPPI Energy had last October jointly filed with the Public Service Commission of Wisconsin for a Certificate of Authority to upgrade various power block equipment at Elm Road station to facilitate the use of sub-bituminous Powder River Basin coals at a plant that basically was designed last decade around bituminous coal from the Pittsburgh seam in Northern Appalachia. The utilities are also seeking authority to construct a site bulk material handling (SMBH) project at the adjacent Oak Creek and Elm Road plants. Notable is that Oak Creek is already burning PRB coal.
Providing March 6 rebuttal testimony in the case, in part in response to contentions by the state Citizens Uility Board, was Jeff Knitter, Manager of Planning in Wisconsin Electric Power’s Wholesale Energy and Fuels Department. He pointed out: “[T]he annual savings for the Fuel Flexibility Project are $31 million at a coal blend of 60% PRB and $78 million at 100% PRB and, the annual savings for the SBMH Expansion Project are $16 million at 60% PRB blend and $52 million of savings at 100% PRB.”
Knitter went into a long explanation of computer model runs for the project, and concluded with: “If the SBMH Expansion is approved and built, the project cost will be paid for as a capital project with the normal, predictable, capital recovery cost stream. Without the project, the costs will show up as reduced revenue from ERGS and Oak Creek due to a lack of coal to keep the units running at their economic maximum capability. As discussed, the reduced revenue will be hard to accurately predict but relatively easy to quantify after the fact.”
Richard E. O’Conor, Major Projects Manager in the Generation Projects group of Wisconsin Electric Power, also countered in his own March 6 testimony some state agency criticism about site environmental issues by writing: “The Applicants have, and will continue to work with those regulatory agencies to address any environmental issues, and we ask that the Commission defer to those agencies to avoid regulatory duplication. The Applicants have already voluntarily committed to plant trees in an alternate location; retained an expert, Stantec Consulting Services, to conduct an environmental assessment for the project; and have been working with Hessler & Associates and the Union Pacific Railroad to address noise concerns.”