FDS Coke asks for an extra year to start building its 135-MW cogen in Ohio

FDS Coke Plant LLC on Oct. 17 asked the Ohio Power Siting Board for another extension, this time for 12 months, of its Certificate of Environmental Compatibility and Public Need for the FDS Co-Generation Facility in Toledo.

FDS said it has secured financing and is engaged in arranging a financial disbursement schedule. It is also completing detailed construction kick-off planning for this state-of-the art non-recovery metallurgical coke oven plant and the associated FDS Co-Generation Facility in Toledo. A primary by-product of the non-recovery coking process, which bakes coal into coke is excess heat, which is turned into steam during the waste gas cooling process required for air pollutant control. Steam from the non-recovery coke oven plant waste gas cooling process will be condensed and used by the FDS Co-Generation Facility to generate “zero emission” electricity that results in no additional air pollutant emissions.

The FDS Co-Generation Facility is a key technical and financial component of the nonrecovery coking plant industrial development. Large alternative users of steam to be generated by the plant are not available in the area immediately surrounding the proposed site, the company noted. More importantly, the value of the electricity generated is a large economic benefit to the proposed project and without expected future power payments from the FDS Co-Generation Facility, the entire project is not economically feasible.

During an initial 12-month extension of the certificate, FDS continued various work, incuding at PJM Interconnection to get this project connected to the grid. During the second 24-month extension of the certificate, FDS also continued an ongoing good faith effort to finalize financing and begin construction by completing the following:

  • Meeting with Thyssenkrupp Industrial Solutions (USA) Inc., to review requirements for the 120 day preparation for the detail design, procurement, and construction effort for the entire FDS Project. Thyssenkrupp filed a letter Oct. 17 with the board supporting this latest extension.
  • Securing an agreement with Thyssenkrupp as the Engineering Design, Procurement and Construction (EPC) company for the entire FDS Project including the FDS Co-Generation Facility and initial negotiation with Thyssenkrupp as the operator of the entire FDS Project, including the FDS Co-Generation Facility, for three years following the completion of construction.
  • Receiving the PJM final Interconnection Service Construction Agreement (ISCA) and final Interconnection Service Agreement (ISA) for the FDS Co-Generation Facility. This milestone included the wire transfer of an initial security deposit in the amount of $200,000 to PJM.

Said the Oct. 17 extension request: "This final requested twelve (12) month extension of the Certificate of Environmental Compatibility and Public Need is necessary to complete final banking activities related to the disbursement of a $800 million Letter of Credit (LOC) that FDS has secured for the financing of the FDS Project construction activities and the kick-off of onsite construction activities that meet the Ohio Power Siting Board’s definition of “commence to construct.’"

The company said FDS Co-Generation Facility and associated non-recovery coke plant are in the public interest as follows:

  • First, metallurgical coke is the essential ingredient which is added to iron ore in blast furnaces to make steel. As such, coke is a strategic raw material for the production of iron and steel in Ohio and the United States. Currently, more than 50% of the United States domestic metallurgical coke is produced by plants that are more than 40 years old and operate with old technologies that are increasingly unable to meet modern air pollution control standards.
  • Second, the FDS Co-Generation Facility is a key component of an industrial project that represents a capital investment of up to $800 million in the state of Ohio. In addition, construction of the non-recovery coke plant and FDS CoGeneration Facility will require up to 1,500 construction workers for approximately 2.5 years.
  • Third, the FDS Co-Generation Facility will be a stable “capacity resource” of at least 1 million megawatt hours per year (MWhrs/yr) of “zero emission” electricity within the capacity deficient electricity load area located along the northern tier of Ohio. As a result, the FDS Co-Generation Facility will reduce transmission congestion, thereby enhancing the reliability of the transmission network in Northwest Ohio that is the intersection of the PJM and Midcontinent ISO interconnection grids.
  • The by-product steam that will be used to generate electricity with virtually no additional air pollutant emissions will replace “capacity resource” electricity that would otherwise be generated by burning fossil fuels.

The company said the continued delay experienced to date in the construction of the FDS Co-Generation Facility was not caused by the applicant since issuance of the certificate in October 2008. The widespread constriction in the United States (and World) economy and the financial markets from 2008 through 2014 has adversely impacted the ability to secure construction financing for large industrial and energy developments such as the nonrecovery coke plant and FDS Co-Generation Facility. In addition, the validity of Ohio EPA modified air permit for the non-recovery coke plant that is required for the FDS CoGeneration Facility to operate was under appeal to the Ohio Environmental Review and Appeals Commission by opponents to the project since issuance in 2008.

In September 2011, after years of litigation, the Ohio Environmental Review Appeals Commission ruled in favor of FDS on the remaining legal issue associated with having initiated construction and, therefore, FDS continues to have a valid Ohio EPA-issued air emission permit for the non-recovery coke plant. "Resolution of this critical legal issue and the improving economy has allowed FDS to start anew in securing financing for construction of the project," the company said.

In prior news for this project:

  • The Federal Energy Regulatory Commission in January 2015 accepted a filing by PJM of an executed Interconnection Service Agreement with FDS Coke Plant LLC and American Transmission Systems Inc. The FDS Coke ISA facilitates the interconnection to the PJM system of a 135-MW co-generation facility located in Lucas County, Ohio, near Toledo. The FDS Coke ISA indicates that FDS Coke shall have Capacity Interconnection Rights in the amount of 135 MW. Under the ISA, on or before July 1, 2017, FDS Coke must demonstrate commercial operation of this facility.
  • The Ohio board in September 2013 had agreed to extend the construction start deadline for this project by one year, until Oct. 28, 2014. In October 2014, the Ohio board again voted to extend the project’s certificate, this time through Oct. 27, 2016.
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.