Coal Power-Related Developments for Dynegy, Luminant, the FutureGen Alliance, and Sunflower Electric

The U.S. coal power industry saw a spate of important announcements this week.

Dynegy Reconsiders Role in Building Coal-Fired Plants

Dynegy told Reuters last week that it is rethinking its participation in developing six future power plants and two coal-fired plants currently under construction in Texas and Arkansas because of high capital costs and the complexity of permitting new coal plants.

Reuters said that Dynegy’s reevaluation includes activity related to siting, permitting, financing, and construction of at least six coal or natural gas projects, including the 1,600-MW White Pine coal plant in Nevada, the 750-MW Elk Run coal project in Iowa, the 750-MW Mid-Michigan coal plant, the 1,200-MW West Deptford gas-fired plant in New Jersey, the 1,200-MW Longleaf coal plant in Georgia, and a 665-MW expansion at Plum Point.

It also includes the company’s investment in two coal plants currently under construction: the 665-MW Plum Point power plant in Osceola, Ark., and the 900-MW Sandy Creek station under construction in Riesel, Texas.

Environmental groups, such as the Sierra Club, have targeted the company for its plans to build coal-fired power plants across the nation. Recently, as POWERnews reported, it was also pushed by New York Attorney General Andrew Cuomo to disclose climate change–related financial risks, including current and projected carbon emissions from coal plants, to its investors.

Dynegy CEO Bruce Williamson reportedly said that, instead of looking to build plants at “new” sites, the company will look to add generation at existing sites within Northeast, Midwest, and Western U.S. power markets.

"We just think that a better use of our time and capital is to look at opportunities internally," he told Reuters.

Luminant Strikes Deal on Oak Grove Power Plant

Luminant said last week it reached agreement with environmental groups Sierra Club and Public Citizen regarding the company’s Oak Grove power plant in Texas. The agreement provides for an additional regulatory review of environmental controls at the Oak Grove plant and provides for Luminant to offset any emissions above the final levels set in that regulatory review. In return, the environmental and consumer groups have agreed to forego legal opposition to construction and operation of the Oak Grove facility, although they may participate in the additional regulatory review.

“This agreement gives us greater legal and regulatory certainty as we complete the Oak Grove generating station, which will help meet growing Texas electricity demand,” said Luminant General Counsel Bill Moore. “We’re confident that our state-of-the art emissions control technology will continue to meet or exceed all regulatory requirements, reflecting our ongoing commitment to environmental stewardship.” 

The Sierra Club and Public Citizen previously announced their intention to file a lawsuit to force a regulatory determination regarding certain emission limits set by previous permits for Luminant’s Oak Grove plant. Under this agreement, Luminant has agreed to secure a separate regulatory determination that the Oak Grove power plant is using “maximum achievable control technology” (MACT) to control certain emissions, including mercury.

Moore said Luminant is doing as much as or more than any other company in the nation to voluntarily cut mercury emissions from coal-fueled power plants. "Across our fleet, we are adding new emission control technologies costing more than $1 billion,” he said.

Luminant is currently installing sorbent injection systems at the Oak Grove plant that will use activated carbon to control mercury emissions. This is in addition to significant other emission controls, such as selective catalytic reduction systems for nitrogen oxide reduction and scrubbers for sulfur dioxide reduction.

Luminant will file an application with the Texas Commission on Environmental Quality seeking a MACT determination for Oak Grove Units 1 and 2 later this week.

FutureGen Alliance Closes on Land for Clean Coal Project

The Associated Press (AP) reported last week that the FutureGen Alliance, a public-private partnership of power and coal companies, closed on the purchase of a 400-acre site in eastern Illinois.

The AP said that the alliance hoped Barack Obama would revive plans for the $1.8 billion FutureGen plant when he assumes office.

The Department of Energy earlier this year withdrew its support—citing increased costs—of the clean coal project that would have proven the technical and economic feasibility of producing low-cost electricity and hydrogen from coal while nearly eliminating emissions.

Kansas Upholds Rejection of Permit for Coal-Fired Plant

The Kansas Office of Administrative Hearings (OAH) on Thursday upheld the secretary of health and environment’s decision to deny Sunflower Electric Cooperative’s application for an air quality permit for its $3.6 billion coal-fired power plant project in Western Kansas.

Secretary Roderick Bremby, backed by Gov. Kathleen Sebelius, in October refused to grant the air quality permit to Sunflower Electric, citing elevated carbon dioxide emissions. The OAH said in an emailed statement that with its ruling Thursday, it had affirmed that Secretary Bremby’s decision was “proper and within his authority.”

Sunflower, which had expected the decision, had initially wanted to take the matter directly to the Kansas Supreme Court, but it was directed by the court to exhaust its administrative remedies first.

“We commend the hearing officer for his expedited ruling and acknowledgement [that] the proper place for this matter is before the courts,” Sunflower Electric said in a statement. “We agree with his assessment, and hopefully, with this decision, the Supreme Court will now lift the stay and take up the case in an expeditious manner.”

Sources: AP, Reuters, Luminant, Dynegy, Kansas Office of Administrative Hearings, Sunflower Electric