NRG runs into issues over stalled Avon Lake coal-to-gas conversion in Ohio

A stalled coal-to-gas conversion of NRG Energy‘s (NYSE: NRG) Avon Lake power plant in northern Ohio is why the Ohio Power Siting Board should not extend the board’s approval of a natural gas pipeline to supply the converted plant, said the Lorain County Property Owners group in Oct. 18 arguments filed at the board.

On Oct. 5, NRG Ohio Pipeline Co. LLC asked the board to extend the duration of the certificate to construct the natural gas pipeline, metering station and regulating station in Lorain County. But the property owners asked the board to enforce the two-year automatic expiration of NRG’s certificate that was in effect when the certificate issued on June 4, 2015. 

The property owners said they have come to rely on the two-year expiration date of June 4, 2017, as a date certain for construction to commence and for the eminent domain litigation against them to be resolved or at least to be in its final stages. “If the Board grants NRG Pipeline’s Motion, it will only further enable NRG Pipeline to improperly delay these proceedings and impose further hardship on the Property Owners,” they said.

The property owners said that since the June 2015 certificate approval, NRG Pipeline has done little to further the project or the gas conversion at the Avon Lake power plant. “NRG Pipeline admittedly has no idea when it will begin construction of the Pipeline and has not even selected a contractor,” they added. “This is likely due to NRG’s apparent change in course with regard to the Avon Lake power plant gas addition—the supposed purpose for the Pipeline. NRG has not acquired any of the equipment necessary to perform the gas addition, and has no established timeframe for doing so. NRG has also not performed any of the necessary preliminary engineering or design work for the gas addition and has not even selected contractors to do that work. NRG has, on the other hand, taken actions at the Avon Lake power plant to eliminate the need for the gas addition and the Pipeline. First, NRG obtained an exemption for the Avon Lake power plant’s B010 generator from the new air emissions standards that supported the alleged need for the gas addition and Pipeline. Second, NRG installed air pollution control equipment that enables the Avon Lake power plant to meet those emission standards with its coal-fired B012 generator. And on September 2, 2016, the Ohio EPA issued a letter finding that the Avon Lake power plant had complied with emissions standards for “all pollutants” without the gas addition.”

B012 is Avon Lake Unit 9, while B010 is Unit 7. A July 26 Title V permit approval issued by the Ohio EPA said that Unit 9 has recently gotten activated carbon injection and dry sorbent injection installations for Mercury and Air Toxics Standards compliance, and that these new controls are a “bridge” until the natural gas conversion project can be installed.

The property owners added in their Oct. 18 complaint: “NRG principle Alan Sawyer summed it up when he testified that he is not in a position to make a decision about whether the Avon Lake power plant would ever add natural gas as a fuel source and that ‘never put[ing] the pipeline in’ is a possibility. NRG/NRG Pipeline is evidently either undecided or has decided against constructing the gas addition and Pipeline.” That is a reference to a June 20 deposition that Sawyer gave in a related lawsuit in Lorain County Common Pleas Court, with a copy of part of that deposition attached to the property owners complaint to the board.

NRG Ohio Pipeline didn’t mention the status of the Avon Lake conversion in its Oct. 5 extension request. It wrote: “The Company is actively pursuing the pipeline project. Much of the development, engineering and planning work for the project is complete. The Company is currently acquiring easements along the pipeline route.”

NRG noted that board rules say the certificate will automatically expire on June 4, 2017, if a continuous course of construction has not commenced by then. Subsequent to the issuance of the company’s certificate, the board extended the period of time before a certificate expires from two years to three years. The company requests that the board or administrative law judge grant its motion to extend the term of its certificate to June 4, 2018, thereby reflecting the new three-year limit.

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.