The Iowa Utilities Board on May 28 granted Interstate Power and Light a waiver that allows the utility to move forward with oil-to-gas conversions of three existing units at the Marshalltown power plant.
On Feb. 20, Interstate Power and Light (IPL) filed with the Utilities Board a petition for waiver with respect to converting the fuel source of three of IPL’s combustion turbines, including a waiver of the notice requirements. IPL asked for expedited treatment. IPL is a unit of Alliant Energy (NYSE: LNT).
In support of its waiver request, IPL said that since 1978 it has owned and operated in Marshalltown, Iowa, the three combustion turbines which are the subject of the waiver request. Each unit has a nameplate capacity of 63 MW. IPL stated it planned to convert the units’ fuel from Fuel Oil No. 2 to natural gas in order to comply with requirements from the Iowa Department of Natural Resources (IDNR) related to the permitting of its new combined cycle Marshalltown Generating Station (MGS), a 650-MW plant that is under construction around the site of the existing CTs.
IPL said the conversion must be completed by the first quarter of 2017 or the units must be retired. The conversion is estimated to cost $39 million. IPL said the units have operated for 40 years and a complete siting review for a fuel conversion would serve no useful purpose.
As a condition to obtaining air permits for MGS, Interstate Power and Light noted that IDNR required all generation at the Marshalltown site to be fueled by natural gas before MGS begins commercial operation, which is projected to be the second quarter of 2017. IPL said the conversion had to begin this summer to be completed by the 2017 projected commercial operation date of MGS, which is why expedited treatment was requested. IPL noted that to maintain system reliability the units have to be shipped off-site one at a time for the overhaul and conversion, adding to the time required to complete the project.
IPL said that with the fuel conversion, the three generators are expected to last an additional 20 years. Based on IPL’s 2014 integrated resource plan (IRP) and electric generation expansion analysis system (EGEAS) modeling, IPL said that the fuel conversion and life extension provide greater benefits than the early retirement of the facilities. Because the capacity of the three units will increase with the fuel conversion, IPL said there could be additional benefits from capacity sales. IPL noted that there are also significant operational and reliability benefits from the three units, if the conversion is allowed.
The board’s May 28 order said: “The public interest will not be adversely affected by the waiver, and the Board will grant IPL a waiver to allow the fuel conversion of the three facilities. The conversion is required by the IDNR as a condition to the commercial operation of MGS, for which the Board has previously granted a generation siting application and ratemaking principles. The facilities have operated for 40 years and continue to supply significant benefits to IPL and its customers. The conversions will not adversely impact the transmission system.
“In addition, the three criteria that would be examined in a generation siting proceeding have been satisfied. Operation of the three units actually enhances reliability and IPL is subject to chapter 476A if there are significant future alterations to the generators or site. The fuel conversion of the facilities is consistent with the state’s environmental policies, as evidenced by IDNR’s MGS permit requiring the conversion. A siting proceeding would serve no useful purpose.”