CO Coal Plant Closing; More to Follow

Tuesday, January 26, 2016 @ 05:01 PM gHale

Another coal-fired plant is biting the dust as one of three units at the Martin Drake Power Plant will close for good by the end of next year, officials said.

On top of that, Colorado Springs Utilities staff need to draft a plan to eventually close the entire plant, utilities board members said last week.

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The 5-4 vote to decommission Drake Unit 5 was a long time coming. The board was to have decided in November whether to mothball, decommission or convert Unit 5 to natural gas use only. It punted the decision until December, when a 4-4 stalemate led to another delay.

Even last week’s decision began with a one-issue motion amended to address five points, then converted back to one issue — only to end up amended and voted down as stakeholders tried to keep up and arguments ensued over which actions required a vote.

Ultimately a motion to decommission Unit 5 by Dec. 31, 2017, won the support of a majority of board members.

The decision on Unit 5 chiefly came from an economic discussion as the staff urged the board to avoid spending more money on a 53-year-old unit.

A retrofit of Unit 5 to burn natural gas only would have cost $1 million, plus $400,000 a year for operations and maintenance. Mothballing the unit for up to three years would carry costs, too – and turning Unit 5 back on would make that option the most expensive of all, the staff advised.

Some board members argued to keep Unit 5 as a backup for extra power, though the staff said Utilities has 150 megawatts of reserve power. That amount would be sufficient even if growth projections doubled, said Katie Hardman, principal engineer on the Electric Integrated Resource Plan.

On a related issue, the coal supply for the city-owned utilities remains assured for 2016 despite challenges in the coal market, reported Eric Tharp, chief energy services officer.

Utilities gets 85 percent of its coal supply from Peabody Energy. And though that company could face bankruptcy, which Arch Coal declared earlier this month, its long-term supply for Colorado Springs is available, Tharp said.

Drake and the Ray Nixon Power Plant both rely on coal from mines in Wyoming’s Powder River Basin, “the Saudi Arabia of coal,” he said. “We do not see any supply problems over the next decade in getting coal.”

The coal mining industry is virtually imploding, though, amid tougher federal air-quality standards, closures of coal-fired power plants across the nation and a moratorium imposed by the Obama administration last week on new coal leases on federal land.

Drake, whose units all are more than 40 years old, now is getting at least $170 million worth of Neumann Systems Group’s NeuStream scrubbers to control pollutants from two boilers.