The coal-fired Wabash River Units 2-5 in Indiana were retired on April 15 of this year and Unit 6 is currently shut pending a decision whether to retire it or convert it to firing natural gas, said John D. Swez, employed by Duke Energy Carolinas as Director, Generation Dispatch and Operations.
Swez routinely supplies fuel cost testimony to the Indiana Utility Regulatory Commission on behalf of Duke Energy Indiana, another Duke Energy (NYSE: DUK) subsidiary. His latest fuel testimony was filed with the commission on April 28.
“As we have previously indicated, Wabash River units 2-5 were retired on April 15, 2016,” Swez wrote. “These units were granted a one-year extension of the April 2015 MATS rule compliance date due to the need for at least two of the four units to operate at any given time for transmission system reliability (in addition to Wabash River Unit 6, which also has a one-year MATS rule extension of time).
“In consideration of the minimization of MATS-related emissions during the extension period and the operational complexities of units at this point in the lifecycle, Duke Energy Indiana employed a MISO offer strategy that prioritized availability and operation of the units to solve transmission reliability constraints. As a result, Duke Energy Indiana generally held two of the four of Wabash River units 2-5 in reserve shutdown available for emergency operation only. The number of units in reserve versus operation varied depending on unit availability, the needs of the transmission system, and energy prices in the MISO market. Additionally, offer prices on these units were adjusted to reflect these considerations.
“The Company’s goal was to maintain the availability of the generating units primarily for transmission reliability support, and specifically to maintain availability during peak demand times such as summer and winter periods when transmission related events and/or energy prices had the highest customer impact.
“Because these units were not available for the full MISO capacity planning year, Duke Energy Indiana sought and was granted a FERC waiver so that it was not required to offer the units into the MISO resource adequacy capacity market for planning year 2015/2016.
“As discussed, Wabash River Unit 6 had a one-year MATS rule extension until April 15, 2016. Operation on the unit has been suspended at the present time. A decision regarding the future operation of the unit has not been made at this time.”
The Midcontinent Independent System Operator on Feb. 4 had filed with the Federal Energy Regulatory Commission a notice of termination of a Generator Interconnection Agreement with Duke Energy Indiana related to the retirement of Wabash River Units 2-5. “Pursuant to Article 2.3.1 of the GIA, the Parties mutually agree to terminate the GIA, effective April 16, 2016,” said the notice. “Terminating this GIA is appropriate, as the Interconnection Customer is retiring this Project.”
The word “Project” is something of a misnomer, since these units are decades old. MISO had filed this GIA with the commission in December 2014, and the GIA showed that these units were initially to be retired on April 16, 2015, with the GIA allowing for a one-year extension to April 16 of this year. These four units total approximately 350 MW, with Units 2-4 at 85 MW each, and Unit 5 at 95 MW. The other coal unit at Wabash River, the 318-MW Unit 6, has been targeted by Duke for either retirement or a conversion to natural gas.
Unit 1 is a coal gasification facility that is owned and managed separately from Duke.