RENEW files testimony on Alliant’s Cassville plant

Michael Vickerman submitted testimony on behalf of RENEW Wisconsin in the proceeding of the Public Service Commission on Alliant’s proposed generation plant near Cassville:

In my testimony I will survey the windpower prospects under development by independent power producers (IPP’s) in the parts of Wisconsin served by WPL. This information will include an estimate of their annual production (in the aggregate) as well as the current permitting and interconnection status for each prospect. The second half of my testimony outlines RENEW’s concerns with WPL’s proposal to co-fire biomass at Nelson Dewey 3 [proposed Cassville plant] . . . .

 

Coal Plants Too Expensive in WI and NV: Platts Electric Utility Week

Two articles by Ethan Howland from Platts Electric Utility Week:

Wisconsin PSC staff urge rejection of 300-MW WP&L coal-fired plant

Wisconsin Power & Light, an Alliant Energy utility, should drop its proposed 300-MW power plant in Cassville, Wisconsin, because of soaring costs for materials and labor and climate issues, according to Wisconsin Public Service Commission staff.

WP&L’s proposed $1.1 billion Nelson Dewey Unit 3 would be the most expensive conventional coal-fired plant in the US, Kenneth Detmer, a PSC staffer, told the commission last week. The plant would cost $3,611/kW. In comparison, the just-finished 500-MW Weston 4 plant, built by Wisconsin Public Service near Wausau, Wisconsin, cost about $1,400/kW, and We Energies’ 1,250-MW Elm Road project, under construction near Milwaukee, cost about $1,800/kW, staff said.

Also, PSC staff believe the cost estimates for the project are unreliable. “The large uncertainty in the [cost] estimates suggests an evaluation of all options needs to occur again before WP&L’s cost estimates can be viewed as reliable,” Detmer said. Staff noted that WP&L’s latest cost estimate, up 20% from a September 2007, forecast, will likely be revised upwards.

Further, PSC staff argue that a plan by WP&L to burn up to 20% biomass at the plant, add 300 MW of wind and retire a 76-MW coal-fired unit early would increase greenhouse gas emissions compared with 300 MW from a super critical coal-fired plant (EUW, 16 June, 24). WP&L, based in Madison, Wisconsin, is proposing to use circulating fluidized bed technology, which is less efficient than other coal-fired technologies.

According to staff, a power purchase agreement or a natural gas-fired plant may be a better option. “I believe that a new coal-fired generation unit, given today’s construction costs and current and likely fuel costs, is not an optimal choice,” said Denis Keptke, PSC senior economist. “I believe the lower risk option for both ratepayers and shareholders is to build a combined-cycle natural gas unit first.”

WP&L is buying the 300-MW Neenah simple-cycle plant in Neenah, Wisconsin, which was designed to be converted to a combined-cycle plant (EUW, 21 April, 5). Converting the plant is an option for meeting supply needs, according to Keptke.

PSC staff also contend that WP&L’s annual load growth estimates, at 2.37% a year, are too high. Staff assumed a 1.65% annual growth rate in its modeling.

The PSC will hold hearings on WP&L’s Nelson Dewey proposal in mid-September. A final decision is expected in December.

Nevada PUC staff urges utilities to pursue smaller coal-fired option

Fearing additional cost increases and delays to a 1,500-MW coal-fired plant proposed by Sierra Pacific Resources’ two utilities, Nevada regulatory staff last week said they want the company to pursue a smaller coal-fired plant at a different site.

Nevada Power and Sierra Pacific Power, SPR subsidiaries, should begin developing a 500-MW coal-fired plant as an alternative to the Ely Energy Center, according to Nevada Public Utilities Commission staff in filings last week with the commission.

In 2006, the utilities pegged the cost for the plant and a related 500-kV transmission project at $3.8 billion. The utilities now think the project will cost about $5 billion. “Staff has concerns about the economic viability of the EEC if construction costs continue to increase at accelerated rates,” Jon Davis, a PUC staff member, told the commission.

The in-service date for the project has been pushed back from 2011 to 2015 for the plant’s first 750-MW unit, with a second unit following a year later (EUW, 7 April, 13). PUC staff believe further delays are possible, which could add to the plant’s cost.

Staff wants the PUC to direct the utilities to explore building a 500- to 700-MW plant next to the existing 522-MW, coal-fired Valmy station. The project would cost less than the Ely project on a per kilowatt basis because it would share facilities with the existing plant, Davis said. PUC staff recommends that the PUC allow Nevada Power to spend $13 million on permitting a new Valmy unit.

Staff said a smaller plant would allow for more geothermal energy to be developed in northern Nevada. The Ely project would allow for about 400 MW of geothermal capacity to be added in northern Nevada while a smaller Valmy unit would allow for 1,100 MW of geothermal capacity to come online by 2020, Davis said.

Staff also questioned Nevada Power’s load forecast used to justify the larger Ely Energy Center. The economy in southern Nevada has slowed significantly and Nevada Power may not need the output from the larger plant, Davis said.

PUC staff and the Bureau of Consumer Protection, which represents ratepayers, recommended that the PUC allow Nevada Power to buy Reliant Energy’s 562-MW Bighorn plant near Primm, Nevada, for $510 million. They also supported allowing Nevada Power build 500-MW of natural gas-fired generation for $682 million at the existing Harry Allen plant.

The PUC staff and BCP recommendations were made in response to a request by Nevada Power to amend its long-range resource plan. The PUC will hold hearings on the request in early September. Adam Grant, a Nevada Power spokesman, declined to comment on the recommendations.

 

RENEW testimony on Cassville plant: plenty of wind, not much biomass

From the testmiony submitted by Michael Vickerman on behalf of RENEW Wisconsin:

In my testimony I will survey the windpower prospects under development by independent power producers (IPP’s) in the parts of Wisconsin served by WPL. This information will include an estimate of their annual production (in the aggregate) as well as the current permitting and interconnection status for each prospect. The second half of my testimony outlines RENEW’s concerns with WPL’s proposal to co-fire biomass at Nelson Dewey 3 [proposed Cassville plant] . . . .

There are seven IPP-owned wind prospects under development. All range in generating capacity from 50 MW to 100 MW, totaling 609 MW altogether. . . .

RENEW’s reservations about WPL’s stated plans to co-fire biomass at NED3 flow from the specifics of the proposal. RENEW strongly supports using biomass for space and process heating. RENEW also supports generating electricity from dedicated biomass facilities that are considerably smaller than a new baseload facility.

One reservation we have this proposal is the idea of marrying a low-grade biomass fuel to a very expensive new power station with a capacity cost of about $4,000/kW. There are less expensive avenues for acquiring renewable energy, such as windpower, that have lower capital costs and zero fuel costs. There are also less expensive venues for burning biomass for electricity, such as the soon-to-be-retrofitted E. J. Stoneman plant or Xcel’s Bay Front 3 unit. Unlike building a new 300 MW coal plant, retrofitting those power stations to burn biomass fuel won’t require a capital investment in excess of $1 billion. It is a far more efficient use of ratepayer dollars to wed biomass fuel with smaller power stations (<50 MW) than with a larger and very expensive brand-new power plant. With smaller power plants, it is possible to configure them as dedicated biomass generating units. This is not possible with a 300 MW facility.

RENEW’s second reservation is triggered by the configuration of NED3. WPL’s selection of a circulating fluidized bed combustion boiler creates an opportunity to co-fire biomass energy sources at NED3. WPL’s plans, however, call for the biomass fuel to supplement the coal being fed into the boiler, which could easily be fueled with 100% coal. There is nothing about the boiler design that is dedicated specifically to biomass generation. Coal is the mainstay in this configuration, while biomass is simply an opportunity fuel to be used when available. The possibility of being unable to acquire enough biomass fuel for co-firing will not in any way hinder the operation of NED3, because there will always be enough coal on hand to operate the plant at its full rated capacity. Also, because the biomass portion of the plant’s output can vary, depending on how much biomass fuel is available, there is no possible way to predict how many renewable kilowatt-hours will be produced at the plant. Depending on NED’s variable biomass output to help satisfy in-state renewable energy requirements introduces a level of risk that can be avoided by relying on other renewable generation strategies.

Our third reservation stems from WPL’s need to lock up significant supplies of fuel sources of wood and energy at a lower cost than what the same resources would fetch in other markets, especially the biomass thermal market. As a general proposition, burning biomass in an electricity-only facility is a low-value use for a resource that can deliver substantially more energy to an end-user in the form of space and process heat. If biomass is burned at NED3, two-thirds of the energy value of the fuel, be it wood, agricultural residues, or switchgrass, is discharged into the atmosphere. In contrast, a modern wood-fired heating system serving a forest products company can convert 65% of the energy embedded in the fuelwood to useful heat. The higher the conversion factor of a particular energy application, the greater the energy return, which generally translates into a higher economic return. Thermal market participants are well-positioned to pay top dollar for the fuel they use, because they receive an energy return that is double what the same fuel yields when burned in a biomass electric facility. Because NED3 will, if approved, have a low thermal efficiency, WPL would be at a disadvantage if forced to match the prevailing biomass fuel price set by thermal market participants in order to secure upwards of 300,000 tons of biomass a year. . . .

Clean Wisconsin and the Citizens Utility Board filed testimony with the PSC further questioning the proposed plant, according to a story by Rick Barrett in the Milwaukee Journal Sentinel.

 

Win-win in Oak Creek settlement

From an editorial in the Milwaukee Journal Sentinel:

With all of the praise over the settlement reached this week on We Energies’ Oak Creek power plants, one might be tempted to ask, “What’s wrong with this picture?” Turns out, apparently nothing is. The deal allows We Energies and its two utility partners in the Oak Creek project to finish construction in a timely manner, provides needed help for Lake Michigan and expands renewable energy in Wisconsin.

And while the $105 million settlement will be paid for by electric customers ($100 million) and shareholders ($5 million), the price tag will be far less than it could have been under a protracted legal battle over the plant’s cooling system. We hope that next time the issues can be settled without going to court, but the utilities involved and the environmental groups who fought the plant deserve credit for reaching a compromise that serves everyone.

The issue settled this week was a dispute over the water intake system that We Energies will deploy to draw 1.8 billion gallons of Lake Michigan water per day for cooling at the new power plant. Environmental groups opposed the intake pipe and were demanding that the utility construct more expensive cooling towers.

More on the blog about the Oak Creek plant.

 

Wall Street’s jitters drove deal on We Energies’ Oak Creek plant

From a story by Tom Content in the Milwaukee Journal Sentinel:

Fielding calls from folks on Wall Street isn’t in the typical job description for someone working for a conservation group.

Opponents of an Oak Creek power plant reached a deal that will provide money to address environmental issues.

But the calls were about the costliest construction project in state history, the $2.3 billion We Energies power plant being built in Oak Creek.

Jittery stock analysts visited with representatives of Clean Wisconsin in Madison this spring, wanting to know whether its eight-year dispute over the building of a coal-fired generating plant could be resolved.

Those jitters were restraining the company’s stock price and were a key driver behind the settlement reached between We Energies and environmental groups. A deal was reached just hours before utility executives were scheduled to field questions from analysts about the plant’s status.

The settlement ended the last piece of litigation, which was being fought over the power plant’s cooling system. It not only removed hurdles to the plant’s opening, it also meant costly cooling towers wouldn’t have to be built.

Clean Wisconsin and the Sierra Club, in turn, won utility company commitments on a couple of high-profile environmental issues — the Great Lakes and global warming.

Although the deal was in the works for six months, it didn’t get done until utility executives faced their quarterly conference call with investors.

“They were clear they wanted to settle this thing before that analyst call,” said Katie Nekola, energy program director at Clean Wisconsin.

“We wanted to communicate that certainty could be accomplished. That is very true,” said Barry McNulty, We Energies spokesman.

 

$105 million settlement includes renewable energy commitments

From a story posted on the Web site of The Business Journal of Milwaukee:

The three owners of the Elm Road Generating Station in Oak Creek will pay $105 million over a 25-year period for Lake Michigan protection projects to end a three- year legal battle over the water intake structure at the power plant, Clean Wisconsin and the Sierra Club said Wednesday.

Clean Wisconsin and the Sierra Club filed suit after the Wisconsin Department of Natural Resources issued a permit allowing the use of a once-through cooling system at the coal-fired power plant. The organizations claimed that once-through cooling did not represent the best available technology for cooling the plant and thus should not be permitted.

Under the settlement, the three utilities that own the generating station — We Energies of Milwaukee, Madison Gas & Electric of Madison and Wisconsin Public Power Inc. of Sun Prairie — agreed to the following:

- Funding $4 million per year from 2010 through 2035 for projects to address water quality issues in Lake Michigan such as invasive species, polluted runoff, toxic loadings, and habitat destruction;

- Purchase or construct 15 megawatts of solar generation by Jan. 1, 2015; and

- Support legislative efforts to establish a renewable energy portfolio standard of 10 percent by 2013 and 25 percent by 2025.

We Energies will also retire two coal-fired units in Presque Isle, Michigan and ask the Public Service Commission of Wisconsin for approval to construct 50 megawatts of 100 percent biomass-fueled power in Wisconsin.

In a media release, Mark Redsten, Exeuctive Director, of Clean Wisconsin said:

“We’re happy to have reached an agreement that has significant benefits for both the lake and the fight against global warming. These environmental protections help ensure Lake Michigan is a healthy natural resource for generations to come.”

From a separate release from the Sierra Club:

“In the long run, this agreement will result in dramatic improvements to the overall health of Lake Michigan and will contribute to the development of renewable energy sources such as solar and biomass,” said Jennifer Feyerherm, Wisconsin Clean Energy Campaign Director.

“It will help us address two of the most critical issues of our time—climate change and protection of one of the world’s greatest freshwater natural resources.”

 

State report not for or against Alliant’s Cassville plant

From an article by Judy Newman in the Wisconsin State Journal:

Wisconsin Power & Light ’s proposal to build a coal- and biomass-fired power plant at Cassville would not be the least expensive option or the least polluting way to meet the Madison utility ’s electricity needs, and it could disrupt an eagle-nesting area, mussels habitat and a culturally significant site, a state report shows.

But the final environmental impact statement on the proposal, made public Tuesday, does not recommend for or against the plans for a 300-megawatt power plant.

In fact, there are few changes from a draft report issued in May, even though WPL announced in June that if state regulators OK the proposal, it will use wood and grasses for 20 percent of the plant ’s fuel, up from 10 percent, will close an aging coal-fired plant near Sheboygan and boost its wind power production.

Those amendments came in too late to be analyzed for the environmental report by staff of the state Public Service Commission, Department of Natural Resources and the U.S. Army Corps of Engineers.

“We ‘re still evaluating some of that, ” PSC spokesman Timothy Le Monds said.

 

Alliant picks biomass suppliers for Cassville plant

From an article by Paul Snyder in The Daily Reporter:

Wisconsin Power & Light Co. is lining up candidates to deliver biomass fuel to a plant expansion it doesn’t yet have approval to build.

The company, a subsidiary of Alliant Energy Corp., announced it selected five Wisconsin companies as candidates for a supply chain for the expansion of the Nelson Dewey Generating Facility in Cassville.

Alliant spokesman Rob Crain said the field of five candidates includes Premier Cooperative, Mt. Horeb; Midwest Forest Products/InDeck Energy Services Inc., Hayward; Bioenergy Products LLC, Lancaster; Futurewood, Hayward; and Marathon-based Marth Wood Shaving Supply Inc. He said the field will be narrowed to one or two companies later this year.

But that’s only if the project gets approval from the state, said Mark Redsten, executive director of Clean Wisconsin Inc., a nonprofit environmental group opposing the expansion.

The Public Service Commission of Wisconsin is reviewing the expansion proposal and must issue its decision by Dec. 15.

Although Alliant promised 20 percent of the plant’s generation will come from renewable sources, the fact the plant would be predominantly coal-fired garnered continuing opposition from groups such as Clean Wisconsin and the Sierra Club.

Most of Alliant’s recent press releases about the project, which is estimated between $1.2 billion and $1.4 billion, highlight the company’s commitment to renewable energy.

Redsten said he’s still not buying it.

“We’ve been hitting them hard,” he said. “I wonder if this announcement (about biomass suppliers) is just an attempt to make the project seem more palatable.”

 

Pro and con of coal-fired Cassville plant

From two guest editorials in the Wisconsin State Journal:

Pro power plant: Step toward greener future
By Louis Okey, Cassville village president

Building the proverbial bridge to a greener future is a challenge we all embrace. It will be costly and require innovation, but it will be a small price to pay for protecting the environment.

Alliant Energy ’s proposed 300-megawatt flexible fuels plant in Cassville is a prime example of how we can make the transition from traditional sources of electrical power to the power of the future.

The prospect of a new “green ” economy in Wisconsin is exciting.

The plant, as proposed, will burn up to 20 percent renewable fuels like switch grass, waste wood and corn stalks along with coal.

Though 20 percent may sound like a modest start toward reducing greenhouse gasses, understand that it will require tens of thousands of new acres under till, create hundreds of new jobs and generate millions of dollars in economic development. . . .

Con power plant: It’s no answer to state’s electricity needs
By Charlie Higley, executive director, Citizens Utility Board

Alliant Energy ’s proposal to build a 300-megawatt coal-fired power plant near Cassville would be a bad deal for consumers and the environment.

The Citizens Utility Board is opposing the issuance of a construction permit for the plant by the Public Service Commission, which will make a decision by December whether to approve the plant.

Electricity rates for Wisconsin residential customers have risen more than 60 percent between 1997 and 2008. During the same time, inflation was 30 percent.

Given that incomes for Wisconsin families have barely kept pace with inflation, electricity now consumes a much larger portion of a household ’s monthly budget, as do other fossil fuels such as natural gas and gasoline.

Rising electricity rates have been caused by excessive utility profits, construction costs for new power plants, and rising prices for fossil fuels. Alliant ’s power plant proposal would cause rates to increase even more.

First, construction costs for new plants have risen dramatically, due to higher prices for steel, concrete, copper, and other materials.

Alliant recently increased the price tag for the proposed plant to $1.2 billion from $780 million, an increase of more than 50 percent. These higher costs will be added to electric bills if the plant is approved.

Second, coal prices for Wisconsin utilities have increased nearly 50 percent since 1999. . . .

 

Alliant needs more compelling case for new coal plant

From an editorial in the Milwaukee Journal Sentinel:

Wisconsin Power & Light Co. took a significant step recently when it promised to offset the greenhouse gas emissions from a new coal plant it is proposing to build in southwestern Wisconsin. Company officials understand the importance of balancing energy sources to provide customers with reliable and affordable energy while reducing emissions that contribute to climate change.

The problem is that while Wisconsin needs power, it also needs to reduce greenhouse gas emissions, not just offset increases in emissions. So while WP&L officials deserve credit for proposing their mitigation plan, they still need to make a more compelling case than they have so far for building a coal plant in Cassville.

State regulators need to carefully examine that case before they make their decision by the end of the year. And unless WP&L officials make a convincing case for the kind of coal plant they have proposed, the state shouldn’t give its OK.

In a recent meeting with the Journal Sentinel Editorial Board, company officials said demand was growing at a rate of 2% to 3% per year. To meet that demand, the utility says it needs to build a 300-megawatt $1.1 billion base load plant that would generate enough power to supply 150,000 homes.

Based on those numbers, WP&L, a subsidiary of Alliant Energy Corp., makes a reasonable case. Neither conservation nor renewable sources now available are likely to fill that demand.

But an analysis by state environmental and energy regulators predicts demand to grow by 1.65%. That analysis also concluded that although Alliant “needs to procure more energy resources to keep rates affordable,” this particular coal plant proposal was “not the least-cost option.” The environmental group Clean Wisconsin and the ratepayer group Citizens’ Utility Board oppose the plant and have urged the utility to spend more on energy efficiency and renewables. . . .