Coal Age

JAN-FEB 2017

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Page 17 of 51

16 January-February 2017 news continued million short tons of steam coal in 2016, up from 842,924 tons in 2015 and 220,910 tons in 2014. At present, Pennyrile, near the navigable Green River, is bud- geted to turn out a similar amount of coal in 2017 to supply its primary customers, Big Rivers Electric Corp. and Louisville Gas & Electric Co., a subsidiary of Pennsylvania-based PPL Corp. Duke Seeks Approval for East Bend Generating Station Duke Energy Kentucky (DEK) is hoping for Kentucky regulato- ry approval in early 2017 for a $93.2 million project to construct new coal ash-handling facilities at its only remaining coal-burn- ing power plant, the 600-MW East Bend generating station on the Ohio River near Rabbit Hash, Kentucky. This will ensure it can comply with new federal Environmental Protection Agency (EPA) regulations and avoid having to close the single-unit base- load plant. In a December application filed with the Kentucky Public Service Commission, the subsidiary of Charlotte, North Caroli- na-based Duke Energy said it wants a certificate of public con- venience and necessity to meet the EPA's new Coal Combustion Residuals (CCR) rule and Steam Electric Effluent Limitation Guidelines (ELG) so East Bend can continue to operate for many more years. The utility said the baseload plant remains a major part of its generation portfolio. The CCR rule, which became effective on October 19, 2015, deals extensively with coal combustion products storage and disposal. The ELG final rule, which took effect on September 30, 2015, sets the first federal limits on the levels of toxic metals in wastewater that can be discharged from power plants, based on technology improvements in the U.S. steam electric power indus- try over the past three decades. Together, the CCR final rule and ELG final rule result in conver- sions to dry handling of bottom ash, increased use of landfills, the closure of existing wet bash storage ponds, and the addition of al- ternative wastewater treatment systems across the utility industry. DEK currently operates the East Landfill at the power plant and is in the process of constructing a replacement landfill, the West Landfill, according to David Renner, vice president of coal combustion engineering for Duke. The utility also operates an ash pond at East Bend. The pond has a volume of 1,844 acre feet and is used to separate bottom ash from the water used to carry the ash from the plant before the water is discharged into the Ohio River. The pond also is used to treat other plant waste streams, such as coal pile runoff and landfill leachate, before they are dis- charged under Duke's National Pollution Discharge Elimination Systems (NPDES) permit. At present, boiler bottom ash is collect- ed in a wet bottom ash hopper at the base of the boiler and then sluiced to East Bend's pond for settling. Approximately 80% of the ash produced at East Bend is fly ash, which is collected from the boiler exhaust using electrostatic precipitators. East Bend went into commercial operation in 1981. In December 2003, the PSC approved DEK's acquisition of East Bend from Duke Energy. Because of the lead times for equipment fabrication and ac- quisition and looming compliance deadlines, DEK is requesting expedited approval from the PSC — a final order no later than April 30. In order to meet the ELG compliance deadlines and to com- plete construction during already planned maintenance outages, the utility said it needs to start construction as soon as practical. That could be as early as this spring, said company spokes- man David Brooks. The utility plans to complete the project by the end of 2018. Ohio Power Plants in Jeopardy of Closing The future of Ohio's two largest coal-burning power plants — 2,400-megawatt (MW ) J.M. Stuart and 2,600-MW General James M. Gavin — along with several of the state's smaller coal plants, is in doubt following two unrelated developments early this year. Dayton Power & Light (DP&L), the investor-owned electric utility that operates and co-owns Stuart, wants to close the plant along with the 600-MW Killen coal plant in mid-2018. To do so, though, the AES Corp. subsidiary will need the approval of the plants' other co-owners. DP&L said in a proposed settlement agreement submitted to Ohio regulators in late January it plans to divest all of its 2,093 mega- watts of coal generation and focus more on renewable energy, natu- ral gas-fired generation and possible power purchases going forward. DP&L owns a 67% stake in Killen but only a 35% interest in Stuart, currently idle following a major January 10 explosion. Stuart remained off line as of early February and a DP&L spokes- woman said it was unclear when the big baseload plant would resume commercial operation. She also declined to comment on whether the timing of Stu- art's potential restart could be affected by DP&L's intention to shutter Stuart and Killen in barely more than a year. Stuart's co-owners are Dynegy Inc., a Houston-based mer- chant generator, and Columbus, Ohio-based American Electric Power Co. (AEP), one of the largest electric utilities in the U.S. Dynegy also owns a minority share of Killen. Although no decision among Stuart's co-owners had been reached to retire the facility, an AEP spokeswoman said in late January her company was in "conceptual agreement" with DP&L about plans to close the plant. Dynegy officials could not be reached for comment. Closing both Stuart and Killen would take nearly 10 million tons of steam coal out of the market annually. More tons could be lost if the Conesville, Zimmer and Miami Fort coal plants also are closed or curtailed. DP&L holds an interest in all three plants as does Dynegy, while AEP co-owns Conesville and Zimmer but not Miami Fort. Dynegy has indicated it wants to become the sole owner of 1,300-MW Zimmer and 1,020-MW Miami Fort. In another development, AEP on January completed the sale of four competitive power plants, including Gavin and three natural gas-fired plants — to a joint venture of Blackstone and an affiliate of ArcLight Capital Partners LLC for approximately $2.1 billion. AEP announced the sale, which included 5,200 megawatts of generation all in PJM Interconnection, a regional grid operator, last September. The joint venture partners have not stated publicly what they plan to do with the plants. Sources, though, said Blackstone and ArcLight primarily are interested in the Waterford Energy, Dar- by and Lawrenceburg gas plants included in the deal, but not so much in Gavin. One source said, in fact, that the $2.1 billion sell- ing price reflected the assumed value of the three gas plants with no real value assigned to Gavin.

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