High Temps, Population Growth Push ERCOT to Demand Records

By Tom Kleckner

It had been four years since ERCOT last set a new demand record, but the Texas grid has been making up for lost time since August began. In the last two weeks, ERCOT has set three new hourly peaks, topping 69,000 MW in demand for the first time ever on Aug. 10.

ERCOT says while the summer temperatures are partly attributable to the increase, the state’s explosive population growth is the real driver.

“A large part of the demand we’re seeing is customer growth over the last few years,” said ERCOT COO Brad Jones last week.

Jones made his comments a few hours after ERCOT issued a conservation alert and asked customers to limit electricity usage during the 3-7 p.m. peak-demand hours Aug. 13. Triple-digit temperatures and outages at several power plants brought the ERCOT system perilously close to its 2,500-MW reserve threshold.

The system set a new all-time peak hourly demand Aug. 10 when it eclipsed the 69,000-MW mark for three consecutive hours, hitting a record 69,783 MW between 4 and 5 p.m. Operating reserves remained above 3,000 MW during the day, Jones said.

ERCOT previously set demand records Aug. 6 (68,912 MW) and Aug. 5 (68,459 MW). Until then, the ISO’s previous record was 68,305 MW, set Aug. 3, 2011.

At this pace, ERCOT will surpass August 2011’s record production of 38.2 GW of energy.

Jones said ERCOT imported power through its two links with SPP but avoided calling for load curtailments or other emergency operations thanks to conservation by consumers. Market prices jumped to about $1,700/MWh during the day.

Population Growth

The U.S. Census Bureau says Texas’ population has grown by 1.8 million people from 2010 to 2014, a 7.2% increase. The state’s population — almost 27 million at the end of 2014 — is expected to double by 2050.

According to the state comptroller, more than 100,000 single-family building permits and 64,000 multi-family permits have been issued in the 12 months ending June 2015.

The comptroller also said Texas’ real gross domestic product grew by 5.2% in 2014, compared with 2.39% for the U.S. The state’s unemployment rate was 4.2% in June, down from 5.0% in June 2014; it has been at or below the national average for 102 consecutive months.

Jones noted ERCOT serves some of the fastest-growing cities in the country. Houston, San Antonio, Dallas, Austin and Fort Worth are among the 16 most populous cities in the U.S.

Some 4,800 MW of new generation will be coming online in the next three to four years, Jones said.

ERCOT said it will continue to monitor conditions as summer demand continues and call for conservation when needed. It has asked Texans to raise thermostats 2 to 3 degrees during peak hours, use fans, limit the use of large appliances to off-peak hours and close blinds and drapes during the afternoon.

“Voluntary conservation can help us reduce the potential for additional measures, such as rotating outages, to ensure reliability throughout the ERCOT grid,” said ERCOT’s Director of System Operations, Dan Woodfin, in one of many press releases the ISO has issued this month.

SPP: Hot, but not Breaking Records

The SPP footprint has seen some of the same triple-digit figures as Texas, but the RTO has not topped its record demand peak of 54,949 MW, set Aug. 3, 2011. Its high for the year came in July, when the SPP Balancing Authority recorded a peak of 45,873 MW.

August 18, 2015June 15, 2023

SPP Taps Ex-FBI Agent as Security Chief

LITTLE ROCK, Ark. — SPP announced Monday it has appointed former FBI agent Mark Bowling as its director of compliance and security. Bowling will oversee SPP’s compliance policies and procedures, including national and regional reliability standards and tariff provisions, and he will be responsible for corporate security monitoring and response.

Bowling, who served as an FBI special agent for 20 years, also worked for the U.S. Department of Education Office of Inspector General. He has investigative experience in computer intrusion, computer fraud, counter-terrorism, national security and counterintelligence. Prior to joining the FBI in 1995, Bowling was a naval nuclear engineering officer with the United States Navy for six years.

Michael Desselle, SPP’s vice president of process integrity and chief compliance and administrative officer, said Bowling’s “expertise in identifying and mitigating cyber threats will be extremely beneficial in leading the effort to protect our critical infrastructure assets.”

— Tom Kleckner

August 18, 2015June 15, 2023

Failed Lightning Arrester Caused April Outage

By Rich Heidorn Jr.

The power outage that darkened the White House and much of D.C. on April 7 began with the failure of a 230-kV lightning arrester in the Pepco portion of the Ryceville, Md., substation 40 miles south of the district, according to a briefing by the North American Electric Reliability Corp. last week.

The outage, which caused a “severe, prolonged voltage sag” in the D.C. area, began about 12:39 p.m. when Pepco’s protection systems failed to isolate a fault on the 230-kV line.

Two separate and redundant protection systems failed, the first as a result of a loose connection to an auxiliary trip relay circuit, the second due to “intermittent discontinuity” in an auxiliary trip relay circuit, according to a presentation to NERC’s Member Representatives Committee.

Pepco and Southern Maryland Electric Cooperative lost 532 MW of load for as long as two hours. Some customers automatically switched to back-up power sources, while customer protection systems separated others from the grid due to low voltage. The outage affected the Maryland peninsula bounded by the Potomac River on the west and the Chesapeake Bay on the east.

Panda Power’s Brandywine 202-MW combined-cycle plant and the Calvert Cliffs nuclear units 1 and 2 (1,779 MW) tripped offline. Brandywine returned to service after about an hour; Calvert Cliffs returned two days later.

Investigators found damage to an A-frame structure at the Ryceville substation, including pitting near burned arresters and a downed static wire. An A-phase conductor was found detached outside the fence line.

There was no evidence of burning to the A-phase arrester, suggesting that mechanical failure resulted from the arc burning off the insulator and the weight of the line breaking the arrester free from the structure.

August 18, 2015June 15, 2023

Talen Posts Profit in First Earnings Report

By Michael Brooks

Talen Energy released its first earnings report as an independent company last week, reporting net income of $26 million ($0.26/share) for the second quarter of 2015.

That’s based mostly on “legacy” data from the company’s plants, which were owned by PPL and Riverstone Holdings before Talen’s formation on June 1. Collectively, these plants’ profits doubled from $13 million ($0.13/share) in the second quarter of 2014. The company’s operating revenue stayed consistent for both periods, at $1.07 billion.

“Strong operational performance from our nuclear and gas generation assets led to improved financial results in the quarter,” CEO Paul Farr said in a statement.

During a conference call with investors, Farr said the Susquehanna nuclear plant performed well in spite of Unit 2’s cracked turbine blades, which have now been repaired. Talen will replace the blades for both Units 1 and 2 during the plant’s next scheduled fuel outage.

Farr also said that Talen will announce by the fourth quarter what assets it will be divesting to meet FERC’s conditions for approval of the company’s creation.

Despite the company’s optimism, Talen’s stock price remains low, closing at $15.95 last week. That’s well below the $20/share when the company went public.

“We do not believe our current share price reflects the underlying value of our business, and capital discipline will remain our top priority,” Farr told investors.

Upcoming Transactions

Talen reported adjusted EBITDA of $171 million for the quarter, a 35% increase over the same period last year.

Talen predicts EBITDA of $990 million for 2016 based on two deals expected to close by the end of the year.

One is the acquisition of three plants from MACH Gen that will see the company enter the NYISO market. (See Talen Entering NYISO in $1.2B Deal.)

The other is the sale of its renewable energy business to California-based Energy Power Partners. The deal was announced in June, and Talen filed for FERC approval earlier this month (EC15-182).

The $116 million sale ($1,785/kW) includes 25 wind, solar and biofuel facilities totaling 65 MW in PJM and ISO-NE.

August 18, 2015

NYPSC OKs 7 REV Demos, Rejects 5

The New York Public Service Commission staff has accepted seven proposed demonstration projects for the Reforming the Energy Vision initiative while asking for more refinements on four others.

The projects, filed July 1, are a component of the state’s REV program for utility-sponsored projects that offer collaboration with third parties. (See REV Proposals Seek to Increase Conservation.)

In letters to the state’s utilities, PSC staff said seven demonstration projects met criteria set out in the REV order. Staff said it would meet with sponsors of the remaining projects to discuss additional information needed to complete its review:

Three proposals by National Grid: a smart grid project in Clifton Park to give customers fixed-rate options based on energy consumption, its Buffalo Niagara Medical Campus engagement platform and its microgrid partnership with Clarkson University and the State University of New York at Potsdam;
Consolidated Edison’s CONnectED Home Platform that would connect homeowners with efficiency programs; and
Iberdrola’s proposed Energy Marketplace e-commerce website.

— William Opalka

August 18, 2015

SPP, MISO, PJM States Join Opposition to Clean Power Plan

By Tom Kleckner

LITTLE ROCK, Ark. — While SPP says it is continuing to analyze the 1,500 pages in the Environmental Protection Agency’s Clean Power Plan, some stakeholders in the RTO’s 14-state footprint wasted no time taking action.

In the first of several expected legal challenges, state attorneys general from half of SPP’s states and six of MISO’s were among 15 who last week asked a federal court in D.C. to block the rules. Arkansas, Kansas, Louisiana, Nebraska, Oklahoma, South Dakota and Wyoming joined West Virginia in filing a petition seeking a stay of the plan pending the outcome of expected legal challenges.

Also joining the petition were Wisconsin (MISO), Ohio (PJM) and Indiana and Kentucky (MISO and PJM). Alabama and Florida, outside of any organized markets, also joined.

But even as elected officials’ rhetoric remains hot, there were signs that the behind-the-scenes work toward compliance has already begun.

Opposition from Okla., Ark.

Oklahoma Attorney General Scott Pruitt, who had filed an unsuccessful legal challenge even before the final rule was issued, continues to argue that the EPA rule is unlawful. EPA’s rules “[force] Oklahoma into fundamentally restructuring the generation, transmission, and regulation of electricity in such a manner that would threaten the reliability and affordability of power in the state,” he said.

Arkansas Gov. Asa Hutchinson also came out guns blazing. “It is clear that the Obama administration’s Clean Power Plan could still result in significant electric rate increases for middle class ratepayers while having a minimal impact on global temperatures,” he said. “My administration will do everything it can to protect ratepayers.”

Hutchinson has directed the leadership of the state’s Department of Environmental Quality (ADEQ) and Public Service Commission “to discuss the details of the rule and the stakeholder process.”

In a press conference Monday, ADEQ Director Becky Keogh and Ted Thomas, chairman of the Public Service Commission, said they have been told to seek the lowest-cost option and will explore strategies that meet the Clean Power Plan while planning for the state’s future and allowing for growth.

Arkansas would need to reduce its emissions by 36.5% from its 2012 levels to meet the rule. Keogh said the state would begin gathering stakeholder input in early October as it decides whether to submit a plan to EPA by the September 2016 deadline or ask for a two-year extension.

“We have a lot more time,” Thomas said, “which is important when you’re making decisions that affect the citizens of the state.”

But Keogh said that while Arkansas has joined litigation against the Clean Power Plan, ADEQ and the PSC will still need to work quickly.

“We feel it’s prudent for the state to begin a deliberative process to evaluate our options and the potential impacts of those options,” she said. “Should the rule become final — and the deadline will be upon us very soon — it’s too important to wait for a final rule and then determine a path forward.”

SPP Analyses

SPP has taken a broader approach when analyzing the Clean Power Plan and its impact on the footprint’s reliability and economics. In an emailed statement, Lanny Nickell, the RTO’s vice president of engineering, noted SPP’s highest priority is maintaining the Bulk Electric System’s reliability in the central U.S.

“Compliance with the Clean Power Plan is best facilitated through SPP’s regional transmission planning process and energy market administration,” Nickell said. “Transmission planning requires analysis of many variables and takes considerable time.”

SPP’s planning process currently operates on near-term and 10- and 20-year cycles. Several stakeholder-driven initiatives are evaluating how to improve the planning process and best take into account Clean Power Plan impacts.

“I imagine there will be modeling based on the new rule,” Thomas said. “We don’t know yet what that’s going to be, but SPP, MISO and other groups we work with have extensive access to modeling, where you can put in price impacts and see the result.”

SPP has issued three reports on the Clean Power Plan since last October.

The first, a transmission-system impact evaluation, warned of rolling blackouts or cascading outages “unless the proposed CPP is modified significantly.” SPP said the original 2020 date for interim goals was unworkable and did not allow enough time to build the needed generation and transmission to accommodate coal plant retirements and deliver wind energy to population centers. (See MISO, SPP: EPA Clean Power Plan Threatens Reliability, Needs Longer Compliance Schedule.)

In April, SPP released a second analysis that indicated a regional-compliance approach with the 2030 deadline would cost an estimated $2.9 billion per year in capital investment and energy production costs. (See SPP: $45/ton Adder, Wind, Gas Meets EPA Carbon Rule.)

SPP issued a third study last month that concluded a state-by-state compliance approach would be a 40% increase over the regional plan. The latest assessment analyzed the EPA rule’s impact on existing generation and resource-expansion plans, without including the cost of new transmission needed to maintain reliability, gas-infrastructure expansion, market-design changes or transmission congestion. (See SPP: State-by-State Compliance Would Hike Carbon Reduction Costs by 40%.)

August 18, 2015

PJM Market Implementation Committee Briefs

VALLEY FORGE, Pa. — The Market Implementation Committee last week approved rule changes that will help the Illinois Municipal Electric Agency to meet its capacity requirements with historic resources.

IMEA is among the load-serving entities that procured capacity resources outside of their locational deliverability areas to serve a portion of their load.

PJM’s Reliability Pricing Model capacity construct, which launched after IMEA obtained its external capacity, does not provide a way to allocate and maintain the benefits of historical resource and transmission service agreements — an issue that can increase an LSE’s costs if its LDA becomes modeled separately and binds in an auction.

The Independent Market Monitor had expressed concern that PJM’s initial proposed solution was overly broad. But it agreed with the revised solution, which covered only LSEs subject to fixed resource requirements (FRR).

FRR entities such as IMEA are subject to a percentage internal resource requirement (PIRR) if their zone is modeled separately, voiding the use of their historic capacity resources.

The solution approved by members makes three rule changes:

The PIRR is enforced only if the LDA has been separately modeled due to certain triggers;
An FRR Entity would be permitted to terminate its FRR alternative election prior to meeting the minimum five-year commitment period requirement under certain conditions; and
First-time elections of the FRR alternative would be due four months prior to a Base Residual Auction instead of the current two-month deadline.

PJM Asked to Consider Masking FTR Ownership

PJM would consider masking ownership of financial transmission rights under a problem statement presented by DC Energy’s Bruce Bleiweis at the MIC last week.

Currently, all RTOs publish the identities of FTR holders when posting auction results. By contrast, in all other market transactions, such as capacity auctions and daily energy auctions, PJM does not disclose the ownership, Bleiweis said.

“I think the inequity is transparent to everyone here,” Bleiweis said. “We don’t see any reason FTRs should be treated differently” than any other power product.

FERC initially allowed the current transparency to spur a secondary FTR market. Now that this market is established, this disclosure is no longer necessary, Bleiweis argued. He said that knowing another company’s position could lead to unfair competitive advantages.

There was some confusion as to what exactly is disclosed in other products, however. Carl Johnson of the PJM Public Power Coalition said he thought PJM published capacity positions of companies once the delivery year began.

PJM’s Tom Zadlo answered that only a list of cleared units is posted. Bleiweis said that if the problem statement is approved at next month’s MIC meeting, he would work with PJM to generate a simple list showing exactly what is posted for each product.

Marji Philips of Direct Energy said she “remains very concerned” by the proposal. In the past, she said, market participants have identified “mischief” in the FTR markets that the Independent Market Monitor and PJM did not catch, based on the increased transparency.

Bleiweis said PJM’s effort would be consistent with ISO-NE, which approved a move to aggregate FTR ownership at its November 2014 Markets Committee meeting.

— Michael Brooks and Rich Heidorn Jr.

August 18, 2015June 15, 2023

Federal Briefs

The Nuclear Regulatory Commission has determined that NextEra Energy’s Seabrook Station could operate for another 20 years beyond 2030 without negative impact on the environment. NRC published its final report on the environmental impacts of renewing Seabrook’s operating license and gave the plant’s owners the green light to move to the next step in the re-licensing process.

“The NRC’s preliminary recommendation is that the adverse environmental impacts of license renewal for Seabrook are not great enough to deny the option of license renewal,” according to NRC, which based its findings on an environmental report submitted by NextEra Energy, consultation with federal, state and local agencies and NRC staff’s independent review and public comments.

A Safety Evaluation Report, the last step in the license renewal process, is scheduled for release in May. NextEra has been working through the renewal application since 2010.

More: New Hampshire Union Leader

Mass. Mayor to Ask FERC to Extend Meetings for Tennessee Gas Pipeline

The mayor of Peabody, Mass., wants FERC to add a special meeting near the city to allow the public to comment on Kinder Morgan’s plan to build a lateral from its Tennessee Gas Pipeline.

Mayor Ted Bettencourt said he would seek the additional meeting after he met with the Northeast Municipal Pipeline Coalition, a group opposing the pipeline. Kinder Morgan has said it wants to build the pipeline to provide fuel for power plants. The Northeast has experienced a shortage in natural gas during times of peak demand, such as frigid winter days and nights.

Several meetings have already been held concerning the pipeline, which is to run from Dracut, through Peabody and connect to an existing line in Danvers.

More: The Salem News

Ninth Circuit Throws out Suit Against FERC Curtailment Order

A panel of judges from the Ninth Circuit Court of Appeals has ruled that a group of wholesale electricity customers has no standing to sue FERC for requiring it to pay for curtailing wind generation in times of unusually high hydro generation.

The customers had argued that the dispatch-curtailment mandate — originally put into place as a result of high expected hydro generation on the Columbia River — meant that increased generation prices would be passed on to them. FERC issued the curtailment policy to cover incidents of “last resort” when high water levels forced Bonneville Power Administration to generate electricity that exceeded demand. In order to preserve system integrity, FERC decided it could mandate curtailment by other generators.

The plaintiffs argued that the mandate exceeded FERC’s area of responsibility, as it dealt with generation rather than transmission. The judges noted that the plaintiffs may suffer harm from the rule but that they had no statutory standing under FERC rules.

More: Courthouse News Service

Report: Wind Could Replace Coal, Gas as Dominant Resources

The National Renewable Energy Laboratory released a report that shows that wind power’s capacity factor could reach 65%, exceeding both coal and natural gas.

The Department of Energy’s lab data indicates that increasing to a 65% capacity factor could reduce wind’s cost, improve transmission line efficiency and provide necessary power at times of peak demand. The report shows that if “near-term” technology and enough appropriate sites are used, the capacity factor of wind turbines could exceed both coal and natural gas. The report also indicated that new wind power technology on the horizon would mean that wind alone would be able to power the U.S. demand.

More: Greentech Media

NRC: Beaver Valley Nuclear Station Has Enough Staff for Emergencies

The Nuclear Regulatory Commission has determined that the emergency plan of the Beaver Valley Nuclear Power Station in Pennsylvania is adequate to meet the needs for any large-scale emergencies. The commission reviewed the new safety guidelines put into place following the 2011 Fukushima nuclear disaster in Japan.

All of the nation’s nuclear stations are undergoing a commission review of plans updated after the disaster.

More: Times Online

NRC Report Says Yucca Mountain Environmental Risk Low

A report issued by the Nuclear Regulatory Commission found that a nuclear waste repository at Yucca Mountain would pose “only a negligible increase” in health risk from radioactivity leaking into groundwater. The study is one of the final products of the funding for the Yucca Mountain project, which President Obama mothballed in 2010.

The report will be presented next month in Washington and Nevada.

More: Las Vegas Review-Journal

New Mexico Site Eyed for Storing Spent Nuclear Fuel

Holtec International has submitted documents showing its intent to file for a license to store spent nuclear fuel at a site in southeast New Mexico. The company said the facility would retain spent fuel from stations that are shutdown or in the process of decommissioning — Connecticut Yankee, Humboldt Bay, Kewaunee, La Crosse, Maine Yankee, Millstone Unit 1, Oyster Creek, Rancho Seco, Trojan, Yankee Rowe and Zion stations.

The letter of intent says that the site is 35 miles from any large population center. Holtec is asking the Nuclear Regulatory Commission for permission to store the fuel underground with the same system being used at Callaway and San Onofre stations.

Holtec said it is planning on filing its complete license application by June 2016.

More: FierceEnergy

NRC Dismisses Complaint Against San Onofre Station as Moot

The Nuclear Regulatory Commission has dismissed a complaint filed by an anti-nuclear organization against San Onofre nuclear generating station as moot because the station is being decommissioned. The Friends of the Earth filed the complaint against San Onofre owner Southern California Edison, alleging it failed to get approval for new steam generators before installing them.

The commission noted that fuel has been removed from the station and it is permanently closed, and so the complaint is unnecessary.

More: The Energy Collective

August 18, 2015June 15, 2023

PJM Stakeholders Seek ‘Miracle’ to Break Offer Cap Standoff

By Rich Heidorn Jr.

VALLEY FORGE, Pa. — PJM stakeholders last week launched another bid to change the $1,000/MWh energy offer cap, but consumer advocates said they were not optimistic about reaching consensus in time for next winter.

Marji Philips of Direct Energy proposed raising the cap to $2,700/MWh for cost-based day-ahead offers and price-based real-time offers — 50% more than the highest offers reported by PJM last winter.

“Everybody likes a piece of it and nobody likes the whole thing,” she said of those with whom she shared the proposal before the meeting. “So that means it must be pretty good.”

PJM’s Board of Managers asked stakeholders to make another attempt to reach consensus after efforts last year fell short. (See Members Deadlock on Change to $1,000 Offer Cap.) Philips and other PJM veterans said the $1,000 cap, which has been in effect for about 18 years, was set as a multiple of the highest prices seen at that time.

In January, PJM won FERC approval for a temporary waiver that allowed prices to rise as high as $1,800/MWh, but the RTO made it through last winter without having to invoke it. In the 75 days that the waiver was in effect, there were 54 cost-based offers between $1,000/MWh and $1,800/MWh, but none cleared.

PJM said the waiver was necessary to allow some gas-fired generators to cover marginal costs that hit $1,200/MWh in late January, as spot gas prices spiked as high as $140/mmBtu.

Higher Cap Better for LSEs

Philips said raising the cap is better for load-serving entities such as her company, because higher LMPs can be hedged while uplift cannot. She said it would also reduce capacity prices because increased energy market revenue would cause a drop in the net cost of new entry (CONE). “Here’s an opportunity to control our destiny,” she said. “We’d rather see [stakeholders] filing [a change] than PJM.”

Philips said she had been reluctant to back a change to the cap on day-ahead offers but was convinced by PJM that it was needed to enable price convergence with the real-time market.

The proposal also would require changes to scarcity pricing rules to ensure that generation dispatched for reserves receives lost opportunity costs — which could be higher than the existing $1,000 cap — she said.

Philips said her goal was “incenting the market to do the right thing. We’re trying to keep PJM as a market and not as a cost-based system.”

PJM Endorses Proposal

PJM officials — who proposed a $2,700 cap on price-based offers and removing the cap on cost-based offers in a FERC docket on price formation in March (AD14-14) — said they would accept the proposal. “It is something we would consider to be acceptable,” said Stu Bresler, senior vice president of market services.

Jim Benchek of FirstEnergy thanked Philips for the proposal, calling it “a good starting point.”

Consumer Reps Wary

But consumer representatives were not quick to embrace it.

Carl Johnson, representing the PJM Public Power Coalition, said he did not think consensus could be reached in time for an Oct. 1 FERC filing — the deadline PJM officials have said is necessary to ensure new rules are in place for winter 2015/16.

Johnson noted that stakeholders were unable to reach agreement last year despite months of debate. “Even though the pope will be in [Philadelphia], I don’t think that’s going to be enough time to give us the miracle we need to come up with consensus,” he said.

“There’s a lot here that we will need to digest,” said Dan Griffiths, executive director of the Consumer Advocates of PJM States.

Griffiths said while consumer advocates are willing to consider lifting the offer cap for generators that can demonstrate costs above $1,000/MWh, they continue to have concerns about letting those offers set LMPs for the entire market.

Philips responded that while stakeholders can debate whether the cap should be lower than $2,700, not allowing high marginal prices to set LMPs is “antithetical to the entire market structure.”

Griffiths said later that his members are willing to consider market clearing prices above $1,000/MWh but that PJM had not demonstrated a spirit of compromise in last year’s efforts, saying the RTO’s unwillingness to consider a cap below $1,800 was “insulting.”

David Mabry, representing the PJM Industrial Customer Coalition, said any change in the cap should be accompanied by broader market power protections than current rules, which test only local market power. He cited the Independent Market Monitor’s charge in the 2014 State of the Market report that some generators appeared to engage in economic withholding during high demand hours in January 2014. (See Monitor: Winter Prices Boosted PJM Prices, Raise Withholding Concerns.) Mabry said cost-based offers should be limited to short-run marginal costs.

Consultant Roy Shanker called market power concerns a “red herring,” saying existing rules are sufficient. “If you misrepresent your costs, you’re in big trouble,” he said.

August 18, 2015June 15, 2023

Entergy Offers to Close Ark. Coal Plant to Meet EPA Haze Rule

By Tom Kleckner

Entergy has proposed closing one of its two largest Arkansas coal plants by 2028 and making modifications to the other to comply with the Environmental Protection Agency’s Regional Haze rule.

Entergy filed the proposal with EPA on Aug. 7, describing it as a “more reasonable, long-term, multi-unit approach” than the agency’s recently published federal implementation plan (FIP) for controlling the utility’s emissions. Entergy said its plan would achieve “virtually identical visibility benefits” as the EPA proposal but cost more than $2 billion less.

The company told EPA it would end coal-fired operations at its White Bluff plant by 2028, accept lower sulfur dioxide (SO₂) emission rates at its White Bluff and Independence plants and install nitrogen oxide (NO_x) control technology on its coal units within three years of the final FIP’s effective date — likely in 2016.

The EPA’s proposed FIP required installation of scrubbers and low-NO_x burners on the four units at White Bluff and Independence, and NO_x controls at Entergy’s gas/oil-fired Lake Catherine plant. The Regional Haze rule seeks to improve visibility in parks and wildlife areas by reducing particulate matter emissions.

The New Orleans-based company said its modeling — which it said “EPA should have conducted but failed to undertake” — indicates it does not need to invest more than $2 billion in scrubber technology at the plants and asked the EPA to amend the FIP accordingly.

Entergy said it would not be able to install dry scrubbers at White Bluff — which it shares with several other entities — until at least 2021, leaving only a few years to recover the approximately $1 billion investment. It said the EPA’s analysis incorrectly classified Independence as a best-available retrofit technology (BART)-eligible resource under the Clean Air Act and said the plant is well below EPA’s haze standards.

“Scrubbers at Independence are simply not necessary to ensure that visibility … nor are they justifiable based on EPA’s own analysis of the visibility benefits resulting from such a huge investment,” Entergy said, citing costs of as much as $1.53 billion to install scrubbers.

The utility also disagreed with the EPA’s analysis that proposed NO_x BART controls at Lake Catherine. Referring to its own study, Entergy said the NO_x controls would result in “inconsequential” visibility improvements.

Entergy said its approach “would ensure superior, long-term visibility benefits than would the proposed FIP” and a “dramatic decrease in [greenhouse gas] emissions, large reductions in SO₂ emissions … and large reductions in … NO_x emissions.”

White Bluff and Independence are both two-unit baseload coal plants capable of generating more than 1,600 MW each. The two plants date back to 1980 and 1983, respectively, and are ranked among the top 45 dirtiest coal plants by Environment America.

Lake Catherine is a 45-year-old, single-unit, gas/oil-fired plant capable of 750 MW. It is used primarily for peaking purposes.

Glen Hooks, director of the Sierra Club’s Arkansas chapter, praised Entergy for the decision to close White Bluffs but said the company should go further. “Although we’re excited about the announcement, we hope that it also spurs the company to take a hard look at its dirty and outdated Independence coal plant,” he said in a statement.