With the coal-fired Tanners Creek plant recently sent into retirement, the Indiana Michigan Power unit of American Electric Power (NYSE: AEP) has a relatively light burden, at least for now, in terms of coal-fired capacity, but with some expensive emissions-control decisions coming up for its Rockport coal plant.
On Nov. 2, Indiana Michigan Power filed its latest integrated resource plan (IRP) with the Indiana Utility Regulatory Commission. That plan covers the 20-year period out to 2035. The key components for I&M under the preferred version of the plan are:
- invest in environmental control equipment to allow Rockport Units 1 and 2 (1,300 MW each) to continue compliant operation under known or anticipated environmental regulations;
- continue operation of the Cook nuclear plant through, minimally, the remainder of its current license periods;
- add 1,235 MW of Natural Gas Combined Cycle (NGCC) generation in 2035 to replace Cook Unit 1, assuming it is retired in 2034;
- add 600 MW (nameplate) of utility-owned solar resources beginning with 20 MW in 2020 and an additional 30 MW in 2021;
- add 1,350 MW (nameplate) of wind resources beginning with 150 MW in 2020;
- implement demand-side resources in the form of additional energy efficiency programs; and
- recognize that residential and commercial customers will add distributed resources, primarily in the form of residential and commercial rooftop solar.
“It is important to note that I&M’s IRP is based upon the best available information at the time of preparation,” the plan noted. “Because changes that may impact this Plan can, and do, occur without notice, this Plan is not a commitment to a specific course of action. The future is highly uncertain, particularly in light of current economic conditions, access to capital, the increasing use of renewable generation and end-use efficiency, as well as current and future laws and environmental regulations, including the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan (CPP). The implementation action items as described in the Plan are subject to change as new information becomes available or as circumstances warrant.”
I&M’s Preferred Portfolio at this point maintains I&M’s two coal units at Rockport, including the addition of Selective Catalytic Reduction (SCR) systems for NOx control in 2017 and 2019, as well as flue gas desulfurization (FGD) systems in 2025 and 2028 for SO2 control. The utility did a deal with the U.S. Environmental Protection Agency in 2013 that allowed it to install in the 2014-2015 period relatively cheap dry sorbent injection systems for control of certain emissions on both Rockport units, which combined with use of low-sulfur Powder River Basin coal allowed the utility to push back the decision on adding costly FGDs.
The SCR at Unit 1 is currently in construction and needs to be operating by the end of 2017 under the deal with EPA. The Unit 2 SCR needs to be operating by the end of 2019.
The Preferred Portfolio compares favorably with the “Fleet Modification” portfolio, which assumes one Rockport unit is removed from I&M’s fleet in 2022 and is replaced with natural gas combined cycle capacity, the plan said. The Fleet Modification Portfolio is somewhat more expensive than the Steady State portfolio in four of five pricing scenarios, and slightly less expensive in one pricing scenario.
At this time, I&M does not have an estimate to evaluate the final Clean Power Plan (CPP) guidelines from the U.S. Environmental Protection Agency.
I&M accomplishments related to the 2013 IRP’s Short Term Action Plan include the following items that have been either completed or are on schedule for completion:
- Acquired 200 MW of wind resources through the Headwaters project;
- initiated and received approval to build a 14.7-MW solar pilot program, which will allow I&M to improve the overall understanding and integration of solar technology as a system resource;
- dry sorbent injection installed at Rockport to meet the mercury limit under the MATS rule; and
- as of June 2015, completed 37 Cook Plant Life Cycle Management-related activities.
A large-scale solar power project is currently underway at four separate locations throughout the I&M service territory. These locations will provide a total of 14.7 MW of nameplate solar power when placed into service. The projects are:
- Watervliet, Berrien County, Michigan, 4.6 MW, in-service in Q3 2016;
- Olive, St. Joseph County, Indiana, 5 MW, in-service in Q4 2016;
- Deer Creek, Grant County, Indiana, 2.5 MW, in-service in Q4 2015; and
- Twin Branch, St. Joseph County, Indiana, 2.6 MW, in-service in Q3 2016.