We Energies wants to spend $62 million to double the coal storage area at the 2,400-MW Oak Creek power plant on Lake Michigan south of Milwaukee, Wisconsin, so that it can blend more Powder River Basin coal with Eastern coal on site and provide a hedge against inconsistent rail deliveries.
In a new filing with the Public Service Commission of Wisconsin, the utility said construction on the project, if approved by regulators, would start in 2015 with completion in 2017.
Oak Creek can currently store about 750,000 st of coal on site, which works out to 313 st/MW or about a 45-day stockpile, company spokesman Brian Manthey said in an interview. The utility wants to increase storage capability at the Oak Creek complex to 1.5 million st, a 90-day inventory.
That would place Oak Creek more in line with other large coal-burning generating stations in the Midwest, he said. Ameren Missouri's 2,400-MW Labadie plant in Missouri, for instance, can store about 2 million st of coal on site, or 833 st/MW.
We Energies' 1,200-MW Pleasant Prairie plant at Kenosha, Wisconsin, can store 1.2 million st of coal on site, or 1,000 st/MW. LAST WINTER HIGHLIGHTED STORAGE NEED
We Energies told the PSC the harsh winter of 2013-2014 underscored the need for additional storage at Oak Creek, one of the largest baseload coal plants in the region.
"The winter was worse than normal because the weather affected the entire energy market -- electricity demand was high, gas demand was high and rail transportation problems were widespread," the utility said. While the Oak Creek units "ran very well," power plants across the region experienced operational problems as a result of the cold weather.
However, the lack of adequate on-site coal reserves has, at times, caused We Energies to limit Oak Creek's power production "to preserve fuel for the plants when needed most to meet customer demand," the utility said.
Recent test burns of PRB coal have indicated Oak Creek could burn a higher blend of the less expensive sub-bituminous coal, backing out some higher-priced Eastern bituminous coal. In all, Oak Creek burns about 7 million st of coal annually.
Currently, there is room to store only about 450,000 st of PRB coal on site. "Hence, additional storage for sub-bituminous coal will be required to more fully utilize the economic benefits" of fuel blending at Oak Creek, the company added.
The utility expects the value of improved fuel availability at the plant to run around $11 million-$14 million/year and the cost of boosting coal inventory is estimated at about $2 million/year, creating an annual benefit resulting from the project of $9 million-$12 million "compared to doing nothing."
The project would include additional coal handling systems, dust control equipment and support facilities.
