News & Information

Mich. public power city mulls replacements for coal-fired plant

Grand Haven, Michigan, on the eastern shore of Lake Michigan, expects to decide later this year what will replace the city’s 70.4-MW J.B. Sims coal-fired power plant after it generates its last electrons on June 1, 2020, according to David Walters, general manager of the local public power utility.

Any solution will most likely include the construction of a 35-40 MW natural gas reciprocating internal combustion engine, or RICE, plant on the footprint of the existing Sims station on Harbor Island.

At its December meeting, the Grand Haven Board of Light and Power agreed that whatever comes after Sims must have the ability to continue powering the city’s downtown underground snowmelt system, something Sims has done successfully for years.

“The board made a commitment to our City Council that local generation would be part of our long-term power supply plan and that our electric utility would continue to supply heat for the downtown snowmelt system,” Walters said.

A new report prepared by Burns & McDonnell affirmed previous local sentiment that Sims has reached the end of its useful life and should be retired. The facility went into commercial operation in 1983.

Unlike many other retiring coal plants in the US, Sims’ pending demise is due more to economic than environmental issues.

The local utility’s average load is around 36 MW to serve its approximately 14,200 customers, though it can spike to near 70 MW during the summer months. In the past, Grand Haven has sold Sims’ surplus power into the wholesale market, earning revenue that helped defray the plant’s operating costs.

But those off-system power sales have dried up as Sims has found it increasingly difficult to compete with lower-cost natural gas generation, Walters said. “Sims is a high-cost resource now.  That is the primary reason we’re shutting it down. It has lost its competitiveness in the wholesale marketplace.”

Sims is equipped with a scrubber to reduce sulfur-dioxide and particulate emissions and complies with current environmental regulations.  However, the utility would be forced to spend millions of dollars over the next few years to replace aging equipment and make other repairs to ensure its continued operation during the next decade.

Burns and McDonnell is recommending the city replace Sims with a new RICE plant. Such a project most likely would cost approximately $45 million and be financed through the issuance of local municipal revenue bonds.

Natural gas would fuel the RICE plant. “Several years ago, Black & Veatch conducted a study to determine the best place to site a local gas-fired generation facility.

The best site was determined to be the current Sims plant property, he said. “The Sims plant is on Harbor Island which is adjacent to our downtown district.” Gas supply lines are already located on the island as gas is used to start up Sims, “so there is adequate gas supply to the site. There are also high-voltage electric transmission lines that go to the island. These are good reasons to build whatever follows Sims at that same location.”

The tentative schedule calls for a new plant to be in commercial operation by June 1, 2023. That is a full three years after Sims is expected to be retired, and Grand Haven will require short-term capacity and energy during the transition period. To do that, Grand Haven plans on utilizing its membership in the Michigan Public Power Agency (MPPA), a joint action agency of 20 Michigan municipal electric utilities.

“Burns and McDonnell is currently working on a project definition report to better define exactly what the new facility may look like.  I think a plan will come to the board and council for approval in late 2019,” Walters said.

Burns & McDonnell cautioned against “overbuilding” capacity to serve the needs of Grand Haven, which is experiencing modest – about 0.5% – annual load growth. If market conditions change in the future, additional generating units can be added to the Harbor Island facility “while avoiding the risk of overbuilding today,” Burns & McDonnell said.

A new replacement power plant will only be part of a more diverse power supply portfolio the utility plans on developing with MPPA.

Whatever final compilation of resources this portfolio contains, Walters said it is important for the muni to maintain stable rates for its customers. Currently, rates average around 12 cents/kWh, which Walters concedes are “higher than our public power neighbors. Our goal is to hold rates stable through the transition, so the BLP can become more competitive.”

American Public Power Association – Bob Matyi

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Consultant addresses Sims plant report at BLP meeting

Article by Alex Doty- Grand Haven Tribune

The consultant tasked with evaluating the Board of Light & Power’s 35-year-old Sims III generating station on Harbor Island attended Thursday afternoon’s BLP board meeting to address the firm’s recently released report, which notes a large investment is needed over the next several years to keep the coal-fired plant safe and reliable.

Black & Veatch is the original design engineer for Sims III, and also provides ongoing monitoring of the plant.

Brad Saad, the firm’s operations and maintenance consultant, noted during his presentation that $35 million would be required for continued safe and reliable operation of Sims III beyond the next five years. If no action is taken, he said there’s a risk of possible equipment and/or catastrophic failure.

“It’s basically worn out,” Saad said. “The equipment is old and it just needs to be replaced.”

And Saad noted that replacement of equipment would just be in-kind replacement of what’s there, and not any modernization or upgrade of the plant.

The report recommends that the BLP invest $4.4 million in the short term to address issues related to safety of workers and plant operation, and any future investments in the plant to extend its life beyond 2020 be minimized in order to shut it down by June 2020. This move, analysts say, would allow the BLP to avoid the costs associated with repairs and overhauls, and compliance with new regulatory rules coming into play the next several years.

“Operating Unit III in its current condition for an extended period of time just doesn’t make much economic sense,” Saad said.

Saad noted that the closure would allow the municipal utility to provide more economical power options to its customers, including a mix of market electric purchases and a new local generation component.

“There’s much less-expensive options that Grand Haven can consider for replacement of its power supply,” he said. “Grand Haven is in a real good position right now.”

The study notes that if the BLP wants to own and control some of its own power generation, it is recommended that the utility consider smaller, flexible generation technologies such as aeroderivative gas turbines or reciprocating internal combustion engines. These technologies would give the BLP the flexibility to quickly come online and meet demand while minimizing reliance on external sources.

Sims staffing addressed
Also addressed at Thursday’s meeting was the issue of Sims staffing related to the power plant’s closure.

BLP Power Supply Manager Erik Booth noted that the June 2020 option is the best time for the plant to close from a staffing perspective.

Under normal circumstances, the plant would have 39 total employees, but it is currently at 27 total employees as the utility begins to transition to the June 2020 closure, Booth said. Once Sims is closed, and with a local generation component part of the future plan, he said there would likely be a total of 13 employees.

The transition can be made through staff attrition if production is ramped down over the next two years, Booth said. By 2020, three production employees will be retired, two will be eligible for retirement and seven production department employees will be eligible for retirement in the next 2-4 years, he noted.

There would also be opportunities for Sims workers to transition to other departments and roles at the BLP.

But if the plant’s life is extended beyond 2020, Booth said they would need to hire additional employees in order to ease the workload on the current staff. That would mean layoffs once the plant is eventually closed.

“Our employees are shouldering a huge workload to help the BLP with this transition,” Booth said. “Current staffing levels are not sustainable in the long term.”

June 28 Board of Directors Meeting Information

Falcon Chicks Banded at Sims

Michigan Department of Natural Resources officials say it was much easier this year to band three male peregrine falcon chicks nesting 240 feet up on the Grand Haven Board of Light & Power’s emissions stack on Harbor Island.

“They treated us much better this year,” DNR wildlife biologist Nik Kalejs said. “Last year maybe was an outlier. Last year, she (mother falcon) was just fighting mad and went after everybody hard. It just makes it harder to concentrate on what you’re doing because your head is on a swivel looking around to make sure she doesn’t come around the curve of the stack and whack you.”
All three of the males produced at the nest box this year appeared healthy, DNR officials said.

“We thought at first one might be a female because the females are a little bit larger,” Kalejs said. “We tried a female band first, and it was so big and so much play on it that the male band fit much better.”

Kalejs noted that this year’s banding occurred later in the season than prior years. In 2017, the falcon chicks were banded in early June.

“It is certainly outside of the normal time frame we’ve seen with Grand Haven birds,” he said.

The wintry weather seen around Grand Haven this past spring could have had an effect on the reproduction process, Kalejs noted.

“We had some weird weather in April,” he said. “It could be something as simple as an aberration in the weather patterns from what we’ve seen in recent years.”

To date, the Grand Haven nest site has produced 45 peregrine falcon chicks — 25 females and 20 males — noted BLP Administrative Services Manager Renee Molyneux. The first chicks reproduced in the box were back in 2001.

Peregrine falcons were listed as an endangered species by the U.S. Fish and Wildlife Service in 1970, after their Midwest population was eliminated in the mid-1960s due to problems with the pesticide DDT. In 1999, following extensive restoration efforts, the peregrine was removed from the federally endangered species list, but it remains on the Michigan endangered species list.

Earlier this year, Kalejs banded three falcon chicks at the Consumers Energy J.H. Campbell Generating Complex in Port Sheldon Township. The three birds banded at the Consumers plant brought the total to 42 chicks that have hatched there since 2004.

There were also falcons banded at nesting sites in Grand Rapids, where boxes are located at Grand Valley State University and the Kent County Courthouse.

Article from Grand Haven Tribune, Alex Doty