Wisconsin Power and Light cuts Riverside project cost by $50m

Wisconsin Power and Light, due to the results of engineer-procurement-construction (EPC) bids taken this fall, has been able to slash $50 million out of its cost estimate for the 650-MW expansion of its gas-fired Riverside Energy Center.

WP&L officials on Nov. 5 filed supplemental testimony to the Public Service Commission of Wisconsin, which since April has been reviewing an application for a Certificate of Public Convenience and Necessitty for the Riverside Energy Center Expansion (RECE) project.

WP&L representative Bob Newell said WPL solicited bids from a number of qualified EPC contractors on May 4. EPC contractors responded with proposals on or before Sept. 18. Additionally, WPL conducted a review of the owner’s costs and contingency related to the project.

WP&L submitted its original cost estimate in the CPCN application for the RECE project based on the information available at the time, Newell said. “WPL now has the EPC proposals that are lower than the EPC portion of the cost estimate provided with the CPCN Application. WPL’s review of the EPC proposals, the cost estimates and the outstanding risks enabled WPL to refine its overall project cost estimate. WPL has reduced its cost estimate at the preferred (west) site from $750 million to approximately $700 million, exclusive of AFUDC and transmission network upgrades.

“The EPC proposals categorize cost estimates in various ways; the specific categorizations and estimates are competitively sensitive,” Newell added. “Therefore, we are not including detailed estimates for the makeup of the EPC costs while the negotiations are ongoing.”

Asked if the EPC proposals cover the completion target for the project in February 2019, Newell wrote: “The EPC proposals include an execution plan that would allow WPL to meet all major milestones identified for the project schedule. Each of the EPC contractors has experience with natural gas combined cycle construction and a demonstrated track record for delivering projects on schedule.

Also filing supporting testimony was WP&L’s Brent Kitchen, who explained why the utility does not intend to update its EGEAS computer modeling in this proceeding as a result of the reduced cost estimate. All but one of the 38 EGEAS runs in this proceeding already concluded that constructing RECE was the least cost option as compared to alternatives in all scenarios that WP&L studied. “Because reducing the capital cost estimate for RECE from $750 million to $700 million will only enhance those results in favor of RECE, additional EGEAS modeling is unnecessary,” Kitchen added. “WPL will, however, be including its revised cost estimate in the analyses it presents going forward in this docket.”

The staff at the Wisconsin PSC on Oct. 6 issued a finding of no significant impact related to the environmental aspects of this project. WP&L proposes to build and operate two combustion turbines (CT) sending hot gases into two heat recovery steam generators (HRSG) with the resulting steam sent through one steam turbine generator to produce electricity. The natural gas would be delivered by an existing WP&L lateral line from an interstate natural gas pipeline, and the electricity would be delivered through a short connection to the existing local 138 kV transmission system.

After generating electricity, the steam would be cooled and condensed over several cycles of repetition by a circulating water system, which in turn would be cooled with a new cooling tower. WP&L would be responsible for the construction, commissioning, start-up, operation, and maintenance of the new plant.

In addition, WP&L would build and integrate a new 2-MW solar energy facility to produce electricity that would be mainly used internally within the Riverside plant. The solar array would also provide data and experience for a study with the Electric Power Research Institute to optimize the operational and integrative configuration of a utility-scale solar facility in southeastern Wisconsin.

The two combined-cycle plant site alternatives under consideration are called the West Site and the East Site. Both are on WP&L-owned property. The West Site is about 90 acres of farmland across a rail line to the west of the existing Riverside plant. The East Site is about 137 acres, some of which is currently covered by the existing but retired Units 1 and 2 of the original Rock River Generating Station (RRGS). It lies east of the existing Riverside plant and closer to the Rock River.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.