Louisville Gas and Electric (LG&E) and Kentucky Utilities (KU) are seeking re-approval from the Kentucky Public Service Commission of a coal waste disposal facility at their Trimble County power plant that, due to permitting issues, has been altered with an accompanying jump in costs since first being approved by the commission in 2009.
The utilities, both subsidiaries of PPL Corp. (NYSE: PPL), filed with the commission on May 22 for a declaratory order that the commission’s orders granting each of the companies a Certificate of Public Convenience and Necessity (CPCN) to construct a multi-phase landfill for coal-combustion residuals (CCR) and related facilities, including CCR treatment and transport facilities, at the Trimble County Generating Station and to recover the cost of the first phase of the landfill through the companies’ environmental-cost-recovery (ECR) mechanisms, remain in full effect.
Since the commission issued the final orders in December 2009, the companies said they have worked continuously to perform additional required engineering, to construct or engage in related activities on and around the landfill site that are all related to the landfill’s construction, and to obtain all necessary permits, and have expended over $24.4 million to advance landfill development under the authority the commission granted. Because the companies expect to acquire all of the necessary permits soon, have completed landfill engineering and development (subject to additional permitting-required changes), expect to issue in the second quarter of 2015 a request for quotations for several key landfill-related facilities (including CCR treatment and transport facilities), and expect to begin additional significant procurement and construction activities in the fourth quarter of this year, the companies are now requesting this declaratory order.
Because the Trimble County Landfill as currently designed is in the same location as originally proposed and will have essentially the same storage capacity, and because it continues to be economical and necessary for the companies to continue to operate the Trimble County coal-fired units, the companies requested that the commission issue the requested order. They asked that the order be issued by by Oct. 1, to permit the companies to enter timely into required procurement and construction contracts later this year.
As proposed in accordance with the preliminary engineering information then available, the landfill was to be located on property owned by the companies (at the head of what the companies called Ravine B), and was to have a storage capacity of 34.5 million cubic yards (MCY). The companies proposed to construct the landfill in phases. Their share of the total estimated capital cost for entire landfill was estimated to be $404.3 million, of which the companies estimated they would expend $70.5 million to build Phase I. The companies had scheduled Phase I of the landfill to be complete in 2012, with the companies’ share of the landfill’s estimated operation and maintenance (O&M) costs to be a total of $15.3 million for 2013-2018.
In addition to their continuous and ongoing engineering and permitting efforts, the companies said they have engaged in numerous construction-related activities on and around the landfill site that are all related to the landfill’s construction, including purchasing 250 additional acres of land, fencing the perimeter of the landfill site, installing a fly ash barge loading system, relocating the station’s helicopter pad, and installing a telecommunication tower. These construction activities account for approximately $15 million of the approximately $24.4 million the companies have expended to date.
Utilities said there was no cave here, but the state prevailed
“Permitting challenges have required the Companies to revise the Trimble County Landfill’s design and cost,” the utilities added. “These permitting challenges have also created unanticipated delays in being able to begin constructing the landfill, delays that have also added cost due to cost escalation.
“The most significant and costly permitting challenge the Companies have encountered concerning the Trimble County Landfill concerns the Kentucky Division of Waste Management’s determination that a karst feature located in the planned landfill layout is a cave that must be protected under Kentucky’s Cave Protection Act. The Companies worked in good faith to preserve its original landfill design by seeking to demonstrate to the Division of Waste Management that the karst was not a cave. Ultimately, the Companies were unsuccessful, and the Division of Waste Management denied the Companies’ landfill-permit application on May 2, 2013. The Companies subsequently revised their proposed layout for the Trimble County Landfill, though the landfill’s currently planned location and storage capacity remain essentially identical.
“The Companies’ revised Trimble County Landfill remains a phased design that will provide large amounts of CCR storage, with a storage capacity of 33.4 MCY (original design was 34.5 MCY). The total capital cost estimate for all phases of the project in the revised design has increased $41.1 million or approximately 10% since the 2010 informal conference. Phase I costs have increased $195.4 million while future phases have decreased by $154 million. The drivers for the Phase I cost increase have been $27 million in escalation due to the permitting delays, $41 million from design changes incorporating the permitting impacts, $102 million in CCR treatment and transport system costs from incorporating the lessons learned on similar equipment that went into operation at the Ghent Station landfill project in 2014, and $25 million in additional engineering and permitting efforts and fees. The reductions in the latter phases of the total project are driven by a $100 million refinement of the estimate and timing of the capping and closure scopes and a $54 million refinement of moving from three phases in the 2009 concept to four phases in this design.”
The Trimble County station is situated on more than 2,200 acres in a rural setting along the Ohio River in Trimble County, 50 miles northeast of Louisville. The plant’s generating assets include TC1, a pulverized-coal-fired unit with a net capacity of 514 MW, and TC2, a pulverized-coal-fired unit with a net rated capacity of 760 MW. TC1 went into commercial operation in December 1990. It is operated predominantly in a baseload mode. TC2 began commercial operation in January 2011 and is a supercritical boiler unit.