Maxim seeks three-year delay for 86-MW Milner project in Alberta

Maxim Power Corp. applied Nov. 2 with the Alberta Utilities Commission for a three-year delay in the construction of an 86-MW, gas-fired addition to its HR Milner coal plant.

The commission in February 2015 approved Maxim’s plan to construct and operate an 86-MW unit at Milner (called the M3 project). The power plant is located approximately 20 kilometers north of the town of Grande Cache, Alberta. 

Maxim is now requesting that the commission grant a time extension for Condition 7, having to do with construction completion timing, of that approval from Dec. 31, 2016, to Dec. 31, 2019.

Maxim Power (TSX: MXG) said in an Aug. 10 quarterly earnings report that as a result of record low Alberta power prices, which have undermined profitability for a prolonged period, it made the decision to dial down operations at the coal-fired HR Milner Unit 1 (M1) and temporarily suspend generation on March 23. On June 29, Maxim resumed the generation of electricity at M1 as it was determined that it was economic to do so through a fixed price firm financial swap agreement. This swap agreement ends in December 2016. The company said it will actively monitor the Alberta power market to determine if it is economically to continue operations into 2017, while continuing to advance its initiatives to convert M1 from coal to natural gas. HR Milner Unit 1 is a 150-MW (nameplate capacity) coal-fired generating facility.

The company also reported that it  is proposing to increase generating capacity at the M1 site by building M3, which will be comprised of two gas-fired turbines located next to M1 and is a cost-effective solution to transition M1 from coal to natural gas. M3 will utilize existing M1 assets including, but not limited to, its boiler, steam turbine, generator, water license, as well as electrical and gas interconnections. Exhaust energy from M3’s gas turbines will be converted to steam and utilized to generate electricity in the existing M1 steam turbine, displacing coal-sourced steam. Before giving effect to the development of M2, M3 will increase the nameplate capacity at the Milner site from 150 MW to 236 MW.

Maxim noted that it has also received regulatory approval to construct and operate M2, a 520-MW natural gas-fired combined cycle facility. Synergies with existing M1 infrastructure such as electrical interconnection, fuel delivery, water license and a skilled operations team, allow the M2 project to achieve a competitive advantage as compared to a greenfield development. The M2 project will be one of the most efficient combined cycle gas turbines in the province and is anticipated to run as a base load facility.

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.