Southwest Generation says its gas plants a good fit with PSCo wind project

An official with Southwest Generation Operating Co. LLC said in July 27 testimony that the company’s fast-start, gas-fired power plants in Colorado would be a good fit with the 600-MW Rush Creek wind project proposed by Public Service Co. of Colorado.

The testimony was filed with the Colorado Public Utilities Commission as part of the commission’s review of the Rush Creek project. It was from David Rhodes, employed by Southwest Generation as Senior Vice President of Business Development & Asset Management.

He said Southwest Generation has three modern gas-fired facilities in Colorado, located at the Public Service Co. of Colorado’s (PSCo) Arapahoe Plant, Fountain Valley Plant and the Valmont Plant. The aggregate capacity of these three facilities is 450 MW and the co-location with the Valmont Plant and Arapahoe Plant at PSCo facilities makes them uniquely valuable for load support in the Denver metropolitan area, Rhodes added. The quick-start LM-6000 turbines at the three facilities also are ideally suited for the integration of intermittent renewable resources on PSCo’s system.

The Arapahoe and Fountain Valley plants supply power to PSCo under Power Purchase Agreements (PPAs), while the Valmont Plant is “currently stranded without a long-term PPA,” Rhodes noted. However, the Arapahoe Plant’s PPA will expire before the end of PSCo’s proposed resource acquisition period in the pending 2016 Electric Resource Plan (ERP).

  • Southwest Generation’s Arapahoe combined-cycle facility (located in Denver) provides 119 MW of summer-rated capacity. The Arapahoe Plant consists of two 40 MW General Electric (GE) LM6000 natural gas aeroderivative combustion turbines, two heat recovery steam generators with supplemental firing, one steam turbine, and Selective Catalytic Reduction (SCR) emissions controls. The Arapahoe Plant can start up within ten minutes.
  • Southwest Generation’s Valmont simple-cycle facility (located in Boulder) provides 80 MW of summer-rated capacity. The Valmont Plant consists of two 40 MW GE LM6000 simple-cycle aeroderivative turbines and can start up within fifteen minutes.

Southwest Generation intends to bid its stranded Valmont facility into Phase II of the ERP and will potentially bid the Arapahoe Plant, Rhodes said.

Rhodes added: “Southwest Generation supports the addition of new, cost-effective resources on the system, whether intermittent or dispatchable. The 600 MW Rush Creek project is claimed by PSCo to be cost effective and Southwest Generation has seen no reason to dispute this claim. Wind generated power can be intermittent, as the wind blows and lulls regardless of electric demand on the grid. Fast-acting and flexible resources, such as gas-fired generation, are typically paired with wind projects to ensure that sufficient generation exists even in times of little to no wind. Each of Southwest Generation’s facilities provide flexible resources that pair well with PSCo’s proposed Rush Creek wind project because each gas-fired plant can be started, ramped up, and begin generating electricity within five to ten minutes of notification. This quick and flexible resource, therefore, works well with PSCo’s proposal.”

Rhodes said that PSCo’s most recent flexible resource study, “An Expanded Study of 30-Minute Flex Reserve on the Public Service Company of Colorado System,” does not adequately examine fast start resources (e.g., resources that start in less than ten minutes). While the study details those reserves that may be ramped up within thirty minutes, it fails to fully address the additional value of resources that are substantially faster. PSCo’s study and assessment of the adequacy of flexible resources depends on redefining flexible from 20-minute standby to 30-minute standby. It does this by qualitatively assuming that the largest wind ramps will be in the middle of a ramp event and that controllers will have more time to respond than previously assumed. However, it provides no quantitative analysis or assurance of this assertion, taking a risk with the system based on this assumption, he added.

Further, the study is based on only a single year of data of wind ramps, despite the fact that NERC reliability standards are based on multi-year loss of load assessments, Rhodes said, adding: “This is a thin factual basis on which to loosen the methodology for flexible resources and reflects a significant risk to the system and customers. We are not confident that the Study provides sufficient information or data to conclude that the wind project will accurately address future needs or fully value 30- or 10-minute dispatchable resources.”

The PSCo unit of Xcel Energy (NYSE: XEL) applied May 13 at the Colorado commission for permission to develop, own and operate as utility rate-based property a new 600-MW (nameplate) wind facility, which is made up of the Rush Creek I and Rush Creek II sites. In addition, it requestef two Certificates of Public Convenience and Necessity for the Rush Creek I and II wind generation facilities, and also to construct and operate a 345-kV generation intertie (the “Rush Creek Gen-Tie”). 

The Rush Creek Wind Project is located on the eastern plains of Colorado. It is primarily comprised of two generation sites (Rush Creek I and II) and the 345 kV Gen-Tie. The Rush Creek I site, hosting a project to be rated at 400 MW, is approximately 75,000 acres located in Elbert County, southeast of Limon, Colorado. The Rush Creek II site, rated at 200 MW, consists of approximately 41,000 acres in Lincoln, Kit Carson, and Cheyenne counties, east of Hugo, Colorado.

In total, the Rush Creek Wind Project will include 300 Vestas model V110 wind turbines with a nameplate capacity of 2 MW each. The Rush Creek project will interconnect to the grid at Public Service’s existing Missile Site Substation in Arapahoe County through the approximately 90-mile 345 kV Gen-Tie.

Other parties criticize aspects of the project

Warren L Wendling, the Principal Consulting Engineer of Wendling Consulting LLC, provided July 27 testimony in this case on behalf of the Colorado Independent Energy Association (CIEA). His testimony explains that CIEA supports the wind project CPCN and supports the transmission line CPCN as necessary to deliver that power to load. However, CIEA has serious concerns with the transmission line CPCN, as currently proposed.

He said that PSCo’s proposal seeks the advantages of a transmission CPCN without the open access principles attendant to a normal transmission line, and therefore the proposal will advantage PSCo projects over independent power producer (IPP) bids in the ERP to the detriment of ratepayers. Without strong conditions on the transmission line CPCN, PSCo’s transmission line development will violate open access to transmission principles and harm competition in the pending ERP, he added.

Wendling explained that, although presented as a transmission CPCN, PSCo seeks to classify the line as a generation asset for purposes of interconnection process, accounting, and ratemaking. The result is that PSCo will require independent power producers who seek to interconnect to the transmission line to pay PSCo a pro rata share of the capital costs as a contribution in aid of construction. In addition, there will be an income tax escalator for capital costs, and PSCo will charge IPPs a pro rata share of ongoing operation and maintenance costs for the line. “This irregular treatment is directly related to the generation asset classification and will not benefit ratepayers,” his testimony said.

Other July 27 testimony came from James M. Van Nostrand, an Energy Policy Expert for EQ Research, who was testifying on behalf of Sustainable Power Group LLC, a power project developer also known as sPower. He said that:

  • Public Service has failed to demonstrate that the proposed project satisfies the “reasonable cost” standard in commission rules. “In support of the proposed project, Public Service cites stale data that fail to reflect the current status of wind development in the western United States, he added. “The cost of wind resources continues to decline, and the out-of-date information cited by Public Service in its analysis fails to capture this trend.”
  • Public Service has failed to show that tax considerations warrant expedited treatment of its request. “The relief it is seeking is extraordinary—by seeking to thwart the resource acquisition process in Colorado—and Public Service has failed to demonstrate circumstances that warrant granting this extraordinary relief. Irrespective of the ramping down of the production tax credit (PTC) after 2016, the economic analysis simply does not support approval of the Project.”
  • By proposing to bypass the ERP process, Public Service would exclude consideration of resources that are more cost-effective than its Rush Creek project. Developers of qualifying facilities (QFs), who currently do not have any opportunities to sell energy and capacity to Public Service at avoided cost except through the ERP process, would be greatly prejudiced if Public Service were permitted to acquire a new renewable resource in advance of the ERP at a levelized cost of energy (LCOE) that exceeds its avoided cost, he wrote.
  • The proposed project is neither consistent with the public interest nor the “no regrets” strategy articulated by Public Service. Rather, the proposed project serves the interests of Xcel Energy’s shareholders to the detriment of Public Service’s customers, and would lead to rate impacts that could be avoided through a properly executed and comprehensive resource acquisition strategy that takes into account all the resources available to Public Service, not just its self-build option.

More July 27 testimony came from Joel Bladow, employed by Tri-State Generation and Transmission Association as Senior Vice President, Transmission. He said PSCo’s proposal to own and operate a 600 MW wind project as part of its resource portfolio is not of direct interest or concern to Tri-State. But, Tri-State has three interests related to the Gen-Tie Line: potential reliability impacts, coordinated transmission planning considerations and costs to transmission customers.

Based on its obligations to its Member Systems and to its network customers, Tri-State’s primary concern is to ensure that the Rush Creek project, including the Gen-Tie Line, does not adversely affect Tri-State’s ability to provide reliable power to its Member Systems and its customers. In this instance, PSCo proposes to connect 600 MW of variable generation to the grid via the Gen-Tie Line. This would amount to one of the largest single generator interconnections in Colorado since interconnection of the Comanche Generating Station Unit 3 in 2010. As such, it has the potential to impact the regional Bulk Electric System, including Tri-State’s transmission system, and could affect Tri-State’s load-serving and transmission obligations.

Bladow said that based on the limited information presently available, Tri-State does not know one way or the other whether the proposed Gen-Tie Line will result in any reliability impacts. It has reviewed PSCo’s 345 kV Feasibility Study for the Gen-Tie Line; however, determining whether it is feasible to interconnect the proposed Rush Creek wind project at the Missile Site Substation via a 345 kV transmission line is not the same as identifying and studying the associated system impacts. Until Tri-State is able to participate with PSCo in an appropriate system impact study, as is the common practice for such projects, Tri-State will not be able to determine whether the proposed Rush Creek project will result in any reliability impacts.

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.