MidAmerican Energy to Switch 674-MW of Coal Capacity to Nat. Gas, Other Fuels

A settlement agreement reached with environmental group the Sierra Club last week may mean that Iowa’s largest utility, MidAmerican Energy Co., will switch 674 MW of coal-fired capacity to natural gas or other fuels by April 2016.

The Des Moines–based company with 732,000 customers in Iowa, Illinois, Nebraska, and South Dakota is controlled by billionaire Warren Buffet. The utility said last week that a notice of intent to sue from the Sierra Club received in July 2012 alleged violations of certain provisions of the Clean Air Act at its Neal Energy Center North, located in Sergeant Bluff, Iowa; Riverside Generating Station, located in Bettendorf, Iowa; and Walter Scott, Jr. Energy Center, located in Council Bluffs, Iowa.

Settlement negotiations resulted in a consent decree that was filed last week with the U.S. District Court in Iowa. "MidAmerican Energy has been and remains in compliance with the law," the company said, however. "MidAmerican Energy consistently and fully reports its environmental performance to the Iowa Department of Natural Resources [DNR], which reviews the reports and determines whether it is appropriate to pursue enforcement against MidAmerican Energy’s plants. The Iowa DNR has not pursued enforcement against any of MidAmerican Energy’s plants."

To "avoid costs to its customers, unnecessary delays, and ongoing uncertainty associated with litigation," the company agreed to commitments in the consent decree, which include completing installation of baghouses at Neal Energy Center Units 3 and 4 by Dec. 31, 2014—work that was already under way before the Sierra Club’s notice of intent to sue.

The agreement will also require, by April 16, 2016, that MidAmerican Energy cease burning coal at Neal Energy Center Boilers 1 and 2 (a total of 418 MW) and Walter Scott, Jr. Energy Center Boilers 1 and 2 (a total of 118.2 MW), and evaluate "the use of other fuels, such as natural gas, for continued operations of these facilities." MidAmerican Energy also will cease burning solid fuel at Riverside Generating Station (a total of 137.4 MW) and will continue to operate this facility using natural gas.

The consent decree would also require MidAmerican to fund and implement a supplemental environmental project and work with Iowa State Fair officials on the possible installation of a 60-kW solar project at the Iowa State fairgrounds. The project would include a public display that shows the energy system output and provides information about distributed solar generation, related federal and state tax credits, and net metering tariffs.

The company said the settlement only builds on an "already strong environmental performance" and efforts to promote renewable energy in its service territory. The company has already implemented a plan to install environmental improvements that aligned with existing and anticipated U.S. Environmental Protection Agency requirements. This includes completing installation of scrubbers and baghouses at its Louisa Generating Station and Walter Scott, Jr. Energy Center Unit 3, while starting new projects to install scrubbers and baghouses at its Neal Energy Center Units 3 and 4. It has also become "become one of the largest rate-regulated utility owners of renewable generation in the U.S.," it said.

The Sierra Club claimed in a statement last week that, with the new consent decree, the total number of coal plants that have been retired or are slated to retire since 2010 had risen to 130—a total of 50,717 MW, or almost a sixth of the nation’s entire coal fleet. Only one new coal plant has broken ground since November 2008, the group said, while noting that in 2012, the U.S. installed more wind and solar than coal, gas, or nuclear power. Nameplate wind capacity installed to date in the U.S. has exceeded 50,000 MW.

Sources: POWERnews, MidAmerican Energy, The Sierra Club

—Sonal Patel, Senior Writer (@POWERmagazine)