New Jersey board again okays gas pipeline to repowered B.L. England plant

The New Jersey Board of Public Utilities on Dec. 16 approved a petition filed by South Jersey Gas Co. (SJG) asking that zoning, site plan review and all other municipal land use ordinances and regulations shall not apply to a proposed natural gas pipeline that will serve the repowered B.L. England coal plant.

In doing so the board found that the pipeline project is reasonably necessary for the service, convenience or welfare of the public. Without the board’s approval, SJG would have needed to obtain local approvals from the Upper Township and Maurice River Township. The mayor and council members from Upper Township appeared at public hearings regarding the proposed pipeline to indicate support for the project, while Maurice River Township officials did not voice opposition at any of the public hearings or in response to any of the petitions filed with the board. Also, the City of Estell Manor and the Board of Chosen Freeholders of Cape May County issued resolutions indicating support for the project.

“This project is yet another case in point where the Board is implementing the policies contained the State’s 2011 Energy Master Plan and demonstrating progress towards the Energy Master Plan’s overarching goals of lowering the cost of energy for customers and promoting a diverse portfolio of clean in-state generation,” said board President Richard S. Mroz. “This proposed pipeline will provide redundancy for approximately 142,000 SJG customers, while also enabling the conversion of the B.L. England power plant from running on coal and oil to running on cleaner natural gas.”

SJG’s proposed 21.6 mile natural gas transmission pipeline is intended to serve the B.L. England power plant at Beesley’s Point in Upper Township and will also increase reliability of service through redundancy improvements for customers in Atlantic and Cape May counties.

Due to environmental concerns, SJG identified six alternate routes for the pipeline. The New Jersey Department of Environmental Protection (NJDEP) has concluded that the route chosen for the project has less environmental impact than the other possible alternate routes based upon wetlands impacts, potential adverse impacts to threatened and endangered species habitat, and minimization of stream and open water crossings. NJDEP and the Army Corps of Engineers have determined that the project and route comply with the relevant standards.

In issuing its Dec. 16 order, the board found that SJG has met its burden of proving that its proposed routing is reasonable, and that no alternative route would be less intrusive to the environment or community. Of the proposed 21.6-mile route for the pipeline, 90% or 19.4 miles of the pipeline will be located within right-of-ways and the remaining 10% or 2.2 miles will be set in easements across private property.

The board also recognized the importance of the B.L. England plant to maintaining the reliability of the electrical grid of the region. The power plant is often required by PJM Interconnection to be operational for grid reliability purposes during severe weather events such as Superstorm Sandy, winter storms, Nor’easters, extreme cold or heat waves. If the power plant were to be retired instead of converting to natural gas, PJM has identified the need for nine required upgrades that would have total projected costs in excess of $145 million. Furthermore, the board noted that PJM identified seven additional overloads attributed to the retirement of B.L. England.

The Dec. 16 action by the board is the fourth such action on the proposed pipeline.

  • The board first issued an order in April 2013 approving a gas service agreement between SJG and B.L. England facility owner R.C. Cape May Holdings.
  • In June 2013, the board approved the route and authorized SJG to construct the proposed 21.6-mile natural gas transmission pipeline.
  • In July 2015, the board approved two amendments to its June 2013 order, adding a restriction that SJG cannot connect any new customer to that portion of the pipeline located within the Pineland’s Forest Area without first obtaining the board’s approval and relocating a planned interconnection and regulator station site from an area within the Forest Area to a location outside the Forest Area. The board’s July 2015 order has been appealed and remains pending before the N. J. Appellate Division.

FERC had to grant waiver due to delayed repowering project

The members of the Federal Energy Regulatory Commission on Sept. 11 had approved an Aug. 3 application by RC Cape May Holdings for a waiver of a PJM policy related to its stalled project for a coal-to-gas repowering of the B.L. England plant. The approved waiver is of the must-offer requirement PJM’s Open Access Transmission Tariff. Specifically, RC Cape May sought a waiver of the requirement to offer the B.L. England plant’s output in the Reliability Pricing Model Incremental Auctions pertaining to the 2017/2018 delivery year.

In April 2014, the commission granted a waiver to the PJM Tariff to relieve RC Cape May of the obligation to offer the station’s output in the May 2014 Base Residual Auction pertaining to the 2017/2018 delivery year.

RC Cape May told FERC that it does not expect the station to be available to provide capacity in the 2017/2018 delivery year, and thus the circumstances that necessitated the waiver granted in the 2014 Waiver Order have not changed. RC Cape May said the station remains unable to provide such capacity because South Jersey Gas has not received all of the permits required to construct the pipeline to the plant.

RC Cape May stated that, while the New Jersey BPU approved of the pipeline construction plans, the New Jersey Pinelands Commission had not done so. RC Cape May explained to FERC that on May 21, South Jersey Gas informed the Pinelands Commission that it would relocate the interconnect station for the pipeline to an area outside of the Pinelands forest area to address concerns.

The B.L. England plant utilizes three generating units using coal and oil. B.L. England is required to comply with several air quality standards. As a result, the plant owner agreed with the New Jersey Department of Environmental Protection to repower B.L. England to natural gas or shut down. As a result, B.L. England ceased using one of its coal generating units in May 2014. Following consultation with the U.S. Environmental Protection Agency, a second amended consent order was entered effectively giving the company to May 1, 2017, to repower B.L. England or shut down.

RC Cape May was required under an air agreement to cease operations of Unit 1 by Sept. 30, 2013, and to cease operations of Unit 2 by May 1 of this year. RC Cape May opted to pursue repowering the station with natural gas combustion turbine technology by retiring both coal-fired steam boilers for Units 1 and 2 and replacing them with a new state-of-the-art combustion turbine and heat recovery steam generator. The steam turbine for Unit 2 would be refurbished and connected to a new combustion turbine and the heat recovery steam generator.

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.