Coal Age

OCT 2015

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AEP, meanwhile, said more than 7,000 megawatts of its unreg- ulated generation fleet in PJM cleared the capacity auction for the 2 018-2019 delivery year, representing all of the capacity its AEP G e n e r a t i o n R e s o u r c e s s u b s i d i a r y b i d i n t o t h e a u c t i o n . A E P Generation Resources, the company's competitive arm, has 7,923 megawatts of mostly coal-burning generation resources. The auction had a clearing price of $164.77/megawatt per day and was the first held under PJM's new capacity performance system designed to encourage investment in power plants and strength- en grid reliability. Nicholas Akins, AEP chairman, president and CEO, said PJM's m arket design improvements "are a step in the right direction to help support the investments needed for reliable generator performance. These higher auction prices for the next three years better reflect the value of reliable generation to meet peak electricity demand." AEP has a similar power purchase agreement before the PUC that covers about 3,000 megawatts of coal-burning generation. Tammy Ridout, an AEP spokeswoman, said the Columbus, Ohio- based company's portion of the Stuart and Zimmer coal plants in Ohio did not clear the 2017-2018 supplemental auction, though t hey did clear the original base auction for 2017-2018. Stuart and Zimmer are jointly owned with other electric utilities and are not operated by AEP. AEP's portion of Stuart and Zimmer also cleared the 2016-2017 supplemental auction and the 2018-2019 base residual auction. AEP is one of the largest coal consumers in the nation, burning more than 40 million tons of steam coal annually. The company has retired more than 6,000 megawatts of coal capacity in the past couple of years, mainly to comply with new federal Environmental Protection Agency rules. East Kentucky Power Cooperative, a Winchester-based genera- tion and transmission co-op, also cleared in the PJM auctions all of the more than 1,600 megawatts of coal generation it intends to keep operating for the foreseeable future. That includes the 1,279- megawatt Spurlock and 341-megawatts Cooper plants. Minnesota Power Will Expand Portfolio, But Keep Coal Minnesota Power, an Allete Inc. subsidiary, plans to gradually diversi- fy its coal-heavy generation portfolio over the next 15 years, but will keep coal firmly in the mix, in particular, it's 585-megawatt Boswell Unit 4, the workhorse of the Duluth-based utility's power plant fleet. Unit 4, part of the 1,025-megawatt Boswell Energy Center in Cohasset, Minnesota, is undergoing a $350 million environmental upgrade to significantly reduce emissions of mercury, particulates, sulfur dioxide and other pollutants. The project is expected to be completed before the end of 2015. In a September integrated resource plan filing with the Minnesota Public Utilities Commission, Minnesota Power stressed Boswell's importance in serving its 143,000 customers in a 26,000- square-mile area of northeastern Minnesota that includes some of the largest industrial customers in the United States. While efficient, the smaller Units 1 and 2 at Boswell, totaling 130 megawatts, could be the focus of an in-depth analysis next decade about whether they should be retired. Unit 3, rated at 365 megawatts, is expected to remain in operation. Boswell burns low-sulfur coal from the Powder River Basin. Longer term, Minnesota Power is aiming for a balanced gener- ation portfolio of about one-third coal, one-third natural gas and one-third renewables. Coal still fuels about 70% of the utility's generation, down from 90% a decade ago. D ave McMillan, Minnesota Power executive vice president, said t he new resource plan, dubbed EnergyForward, "offers a detailed explanation of how we will balance our resource mix to preserve envi- ronmental quality without sacrificing affordability and reliability." n e w s c o n t i n u e d Officials of Morehead State University (MSU), along with members of its board of regents, local and state legislators, held a ribbon cutting ceremony during August for the Craft Academy for Excellence in Science and Mathematics. The academy was designed to meet the unique educational needs of academically exceptional high school juniors and seniors in the commonwealth of Kentucky. A college-level curriculum will allow students to finish high school while also com- pleting up to two years of university coursework. "In my 11 years here at MSU, I think the Craft Academy may be the most transformational activity that has occurred," said Wayne D. Andrews, MSU president. State lawmakers budgeted $2.3 million to establish the acade- my. Alliance Resource Partners CEO Joe Craft pledged $4 million dur- ing the next several years in support of the academy. Craft's gift is the single largest cash gift in the history of MSU. The Craft Academy will offer unique, project-based STEM+X courses that will enrich educational experiences and develop compe- tencies in entrepreneurship and innovation, design and creativity, and civic and regional engagement. "This is a special day," said Craft. "There are certain days in your life that you will remember forever and this is one of them for me." Craft met the students and told the crowd that he had chal- lenged the first class to make the academy the best high school in the nation. At the end of two years, students will have earned a minimum of 60 credit hours, finished high school and have the opportunity to fur- ther their education at MSU or transfer to any other college/universi- ty in Kentucky or elsewhere. Morehead State Dedicates Craft Academy Alliance Resource Partners' CEO Joe Craft (back center), surrounded by stu- dents, academics and politicians, was recently recognized for a contribu- tion to Morehead State. October 2015 www.coalage.com 15

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