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Thursday, May 15, 2014 12:01 am

A life-or-death decision for Dallman power plants

CWLP faces tough choice on old boilers

PHOTO BY RACHEL WELLS
CWLP power plant

 

Springfield City Water, Light and Power must decide whether to upgrade or decomission its three oldest boilers in light of changing pollution regulations, and the utility’s decision could affect the cost of power in Springfield for decades.

An environmental compliance study commissioned by CWLP in December 2013 explored options for the utility’s Dallman 1, Dallman 2 and Dallman 3 boilers. Although the study shows the boilers currently meet many of the applicable pollution regulations, some of those regulations are scheduled to tighten in the next five years, leaving the older boilers potentially out of compliance if no changes are made. With the nation’s power supply projected to drastically decrease in the coming years due to coal plants closing, one CWLP official hopes refitting the older boilers will allow them to act as a hedge against big increases in energy prices.

CWLP has four generation units, the newest of which is the Dallman 4 unit which started operation in 2009. The earlier three Dallman units were commissioned in the 1960s and 1970s, but were continually updated with pollution control equipment to remain in compliance with federal regulations.

Eric Hobbie, chief utility engineer for CWLP, says that while many privately owned coal plants shifted to low-sulfur coal from Wyoming to remain in compliance with pollution regulations, CWLP chose to stick with high-sulfur coal from Illinois and upgrade its generators with equipment to cut pollution.

“These units are vital and are heavily invested in pollution controls,” Hobbie said. That’s something the community should be proud of. We run it cleaner than people who ship the coal in.”

Hobbie says federal pollution regulations are scheduled to tighten in order to reduce carbon dioxide and other pollutants starting in 2015. Operators of coal-burning power plants across the nation have chosen to shut down instead of complying with the increasingly stringent regulations, meaning the supply of energy is dwindling even as the demand ratchets upward.

CWLP currently uses its state-of-the-art Dallman 4 coal furnace at its full 230 megawatts of capacity most of the time, Hobbie says, and that’s usually enough during low-load periods like nights and moderate weather. During hot summers and cold winters, however, the demand for power can spike as high as 440 megawatts, like it did this past winter. In those cases, CWLP needs to run all four of its coal-fired boilers to avoid having to purchase more expensive energy from other producers.

Although the environmental study deemed the older boilers “economically marginal” because CWLP doesn’t use them to produce extra power to sell, Hobbie says using the boilers during high-load periods prevents CWLP from having to purchase expensive outside power from other producers. In that way, he says, the boilers aren’t really marginal because they protect consumers from higher rates.

Even though CWLP currently captures 99 percent of its sulfur dioxide before it leaves the smokestack, the tightening federal rules require CWLP to increase that capture rate to 99.4 percent, Hobbie says. That may seem like a small hurdle, but Hobbie says it will require significant investment by the utility.

One option identified in the environmental compliance study is converting the Dallman 1, Dallman 2 and Dallman 3 units to burn natural gas. Hobbie estimates the potential cost to retrofit three units at between $10 million and $15 million total.

Converting the three older units to natural gas would offer significant reductions in pollutants like sulfur dioxide and mercury. However, the price of natural gas can swing wildly, and the recent cold winter showed that demand can sometimes outpace supply. Additionally, because many households and businesses use natural gas for heat, power plants take lower priority when the supply is low.

CWLP is also considering the addition of new pollution control options to keep the older boilers in compliance as the regulations tighten. For example, certain substances which bind to pollutants can be added to the pulverized coal, preventing the pollutants from leaving the smokestack.

While there is no deadline for CWLP to make a decision concerning the older boilers, many of the applicable pollution controls will start to tighten during the next five years. Hobbie says the utility hopes to make its decision and have any retrofits completed by 2017, when some of the more strict regulations take effect. However, CWLP still must figure out how to pay for the improvements. Currently, much of CWLP’s profit from selling excess energy on the grid goes toward buoying up the City of Springfield’s budget. This fiscal year, about $2 million was transferred to the city from CWLP’s energy sales.

“The last thing we want is a rate increase, so we’re going to explore every avenue we can to see how we can get help,” Hobbie said. “There’s a lot of people who think, ‘Just shut down the older units,’ but there’s a lot of impact there. … The city’s budget is slightly revenue positive, and that’s all due to us. The more power we sell outside the city, the more we transfer over.”

Contact Patrick Yeagle at pyeagle@illinoistimes.com.

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