The Public Service Commission of Wisconsin on Oct. 15 approved an Aug. 21 application from Arcadia Electric Utility (AEU) for authority to upgrade its generator exhaust system at its existing electric generating facility, located in the city of Arcadia, Trempealeau County, Wisconsin.
The estimated total cost of the project, as revsised since the original application and approved by the commisssion, is $650,000.
AEU is a Class C electric utility providing electric service in the city of Arcadia and is a member of the Upper Midwest Municipal Energy Group. AEU purchases energy from Dairyland Power Cooperative (DPC).
AEU owns and maintains standby electric generating units. These standby generating units are accredited in the Midcontinent Independent System Operator (MISO) pool through DPC, and AEU receives capacity payments from DPC. This facility is located adjacent to AEU’s office in Arcadia along the south side of State Highway 95. The 16.4-MW generating facility consists of ten reciprocal internal combustion engine (RICE) generators, ranging in size from 240 kW up to 3,090 kW of nameplate capacity.
These generating units began operation at various times between 1930 and 2006. Although some of the larger RICE generating units can be fueled by gas or diesel, they are primarily fueled using diesel oil.
AEU’s approved project is to replace the aging exhaust systems in seven of its existing RICE generators with new upgraded residential grade silencers and related equipment. This equipment would include oxidation catalysts, a crankcase vent system, and a continuous emissions monitoring system. Units 2, 3, and 4, which are the smaller, older units, would not be upgraded, but would be kept in service in the event of a local emergency.
These older units have mechanical limitations, in that the exhaust temperatures are not high enough to effectively activate the catalysts. The proposed replacement silencers are combination units, containing a total of 14 oxidation catalyst elements, which would be accessible from the outside for cleaning and replacement. The replacement silencers would be located in the exact position as those removed. The silencers would be of a residential grade, providing a higher degree of noise control than the existing deteriorated silencers. The catalytic units would reduce carbon monoxide emissions by 70%, and control emissions of total hydrocarbons, particulate matter (PM10, PM2.5) and odor causing compounds.
In accordance with AEU’s wholesale power contract with DPC, these units have been registered by DPC in the Demand Response Program of MISO as emergency generators. Under MISO tariff rules, the units are also eligible to be counted as capacity resources, enabling AEU to meet its reserve adequacy obligations. Under the U.S. Environmental Protection Agency’s current RICE rules, emergency generators that participate in emergency demand response programs are permitted to run up to 100 hours per year without certain emission controls. Operation at 100 hours per year or less currently exempts the generators from compliance with National Emissions Standards for Hazardous Air Pollutants (NESHAP).
A recent ruling by the U.S. Court of Appeals for the District of Columbia, however, vacated the RICE rules containing the 100-hour exemption from NESHAP emission standards. Further, MISO’s Business Practice Manual establishes the requirements AEU and other utilities must meet in order for their generating units to be certified as capacity resources. AEU states that loss of the 100-hour exemption means that the utility will not be able to meet this requirement.
AEU believes that the loss of this exemption means that as of May 1, 2016, its RICE generating units will no longer be compliant with NESHAP nor able to participate in MISO’s emergency demand response program. Without addressing NESHAP, they will, therefore, no longer be eligible to be counted as capacity resources for resource adequacy purposes. To address these limitations, AEU will add the necessary equipment to bring seven of its RICE units into compliance with NESHAP requirements.
Plans are for the equipment to be installed and operational by April 1, 2016, thereby allowing the units to be eligible to be counted by MISO for the upcoming planning year that begins June 1, 2016. The only alternative to the proposed project would be for the utility to abandon the RICE generation plant and purchase replacement capacity from DPC or an alternate provider, per contract obligations.