20150902Seventh Quarterly Report.pdf

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LISA D. NORDSTROM
Lead Counsel
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September 2,2015
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-13-16 - Selective Catalytic Reduction ("SCR') Controls on Jim Bridger
Power Plant Units 3 and 4 - ldaho Power Company's 7th Quarterly Report
Dear Ms. Jewell:
ln Order No. 32929, the ldaho Public Utilities Commission ("Commission") directed
ldaho Power Company ("Company') to submit quarterly reports updating the Commission
on any changes to environmental policy or regulations until such time as the Jim Bridger
Power Plant upgrades are installed and placed in service. The enclosed materials indicate
that the Company still expects the SCRs on Units 3 and 4 will be placed in service by
December 31,2015, and December 31,20'16, respectively.
Please note that the attachment to this report is commercially sensitive and if
disclosed freely could subject ldaho Power or its customers to risk of competitive
disadvantage or other business injury. Consequently, the attachment wil! be provided
separately to those parties that have signed the Protective Agreement in this matter. The
undersigned attorney, in accordance with RP 233, certifies that this monthly report contains
information that is a trade secret or privileged or confidential as described in ldaho Code $
9-340, et seq., and $ 48-801, et seq., and as such is exempt from public inspection,
examination, or copying.
Very truly yours,
Xo- L7/(r^/.t?4.t,^,
Lisa D. Nordstrom
LDN:kkt
Enclosurecc: Service List
1221 W. ldaho 5t. (83702)
PO. Box 70
Boise, lD 83707
7th Quarterlv Report for the Jim Bridqer Plant
Selective Catalvtic Reduction Upqrade at Units 3 and 4
Seotember 2. 2015
This quarterly report provides an update as to the current status of environmental policies or
regulations that are relevant to the construction of the Selective Catalytic Reduction ("SCR')
controls at the Jim Bridger Plant Units 3 and 4 ("Bridger Plant"), as well as a construction
progress update for the SCR installation project through August 12, 2015, and a schedule of
major construction milestones. Finally, a summary of actual project costs and a forecast of total
project costs as of June 30, 2015, is provided as a confidential attachment to this report.
Environmental Reou :
Clean Air Act Section 111(d) for Existino Power Plants
On August 3,2015, the U.S. Environmental Protection Agency ("EPA") released its final rule
establishing greenhouse gas performance standards for existing power plants under Clean Air
Act Section 111(d) ("Final Rule"). EPA refers to this rule as the "Clean Power Plan" or 'CPP'.
The Final Rule contains many changes from the proposed rule. The EPA made changes to
allow for increased use of thermal generation due to hydro variability and made adjustments for
plants like Langley Gulch that came online in 2012.
The calculations that led to final goals for each state are now based on a regional approach
rather than a state-by-state approach, which has resulted in large shifts in the goals for each
state. Overall, the highest goals (least stringent) were made more stringent with lower
rate/mass goals and the lower goals (most stringent, such as in ldaho) were relaxed with higher
rate/mass goals. Other notable changes to the rule include: (1) the recharacterization of
energy etficiency from a requirement to an option for compliance, (2) the addition of a reliability
safety valve to be used when compliance with the rule has the potential to negatively impact
reliability, and (3) the inclusion of model trading rules for new emission rate credits ("ERCs") or
allowances to be used for compliance.
The final rule is expected to be published in the Federal Register in September. States will be
required to submit a state compliance plan, or an initial submittal with an extension request, by
September 6, 2016. Final completed state plans must be submitted no later than September 6,
2018. lt is estimated that approval or disapproval, from the federal EPA of the implementation
plans will occur 12 months following submittal of the plans.
ldaho Power is continuing to evaluate the impact that the Clean Power Plan will have on its
operations. !n the meantime, the Company is reaching out to state representatives, neighboring
utilities, and other stakeholders to collaboratively assess the impacts of the rule and prepare for
the best path forward for ldaho Power and its customers.
Mercury and Air Toxics Standards ("MATS")
On November 25, 2014, the United States Supreme Court granted a petition for review based
on the issue of whether the EPA unreasonably refused to consider costs in determining whether
it is appropriate to regulate hazardous air pollutants from coal-fired and oil-fired steam electric
generating units. On June 29, 2015, the United States Supreme Court issued a decision
holding that the EPA must consider cost, including the cost of compliance, before deciding
whether regulation is appropriate and necessary, and remanded the case to the District of
Columbia Circuit Court for further proceedings consistent with the United States Supreme
Court's decision. The MATS remain in effect until the District of Columbia Circuit Court
implements the Supreme Court's decision.
Jim Bridoer Units 3 is:
The Company prepared an updated analysis for Jim Bridger Units 3 and 4 SCRs that was
included in Appendix C to the Company's 2015 lntegrated Resource Plan. The 2015 SCR
Analysis re-examined the previous conclusion that installation of the SCRs on Units 3 and 4 is
the least-cost and least-risk means of ensuring that Units 3 and 4 comply with state and federal
emissions regulations. The 2015 SCR Analysis had two objectives:
1. Evaluate the changes in environmental requirements since the previous study that may
have an impact on the cost-effectiveness and/or the viability of the SCRs on Units 3 and
4, and2. Determine the cost-effectiveness of installing the SCRs compared to the fixed costs of
replacing the coal-fired generation from Units 3 and 4 with a combined-cycle combustion
turbine ('CCCT') generation resource alternative.
Based on the 2015 SCR analysis, installation of the SCRs on Unit 3 and 4 continues to be the
least-cost option compared to shuttering Units 3 and 4 and replacing that generation with a
CCCT resource.
Construction Proo :
The project to install the SCR controls at the Bridger Plant is moving forward as planned and is
on schedule to meet the required completion dates. The following section provides a high level
description of the construction activities since the last quarterly report (which provided an
update through May 18, 2015). lt should also be noted that the following updates relate to
projects that were included as part of the Engineering, Procurement and Construction contract
('EPC Contract") or individual projects identified as separate expense categories in the budget.
The Unit 3 structural steel is 99 percent complete and 85.6 percent of the 3,031 tons of Unit 4
structuralsteel has been erected.
As of August 3, 2015, 99 percent of the 7,570 linear feet for the Unit 3 SCR reactor piping had
been completed.
As of August 2,2015, 51 percent of the overall electrical field work had been completed which
consists of: 99 percent of the ammonia area electrical work, 98 percent of the Unit 3 SCR
electrical work, and 1 percent of the Unit 4 SCR electrical work.
The Unit 4 North lnduced Draft ("1D") fan rotor arrived on site on June 25,2015. The South lD
fan rotor arrived on site on July 16,2015. The North lD fan rotor and housing is currently being
assembled.
Shipment of the Unit 3 catalysts began on July 13, 2015; subsequently all the catalysts have
arrived on site and are installed in the reactor vessel.
2
The ammonia receiving and storage facility is nearing completion and a successful dry run for
unloading a shipment of ammonia was performed on August 12,20'15. The storage facility
vapor suppression system is being tested for acceptance.
Work continues to prepare Unit 3 for outage and the SCR tie-in and completion. The Unit 3
outage is scheduled to start on September 5, 2015.
Commissioning activities for the SCR began on June 30, 2015. These activities include:
complete testing of the various systems, testing of controls for proper function, mechanical
equipment checks, and system operations tests. Commissioning work of the entire SCR system
will continue until the project is transferred to the Bridger Plant.
The final SCR operations and maintenance ("O&M") manualwas received on July 16, 2015, and
the three plant copies are onsite. The O&M manual is over 26,000 pages long.
Scherlule:
The project remains on schedule to comply with the required completion dates with the following
major milestones remaining:
o Unit 3 Fall Outage Start - September 5, 2015o Unit 3 Mechanical Completion - November 5, 2015. Unit 3 Compliance Deadline - December 31 ,2015o Unit 4 Fall Outage Start - September 3, 2016o Unit 4 Mechanical Completion - November 3, 2016. Unit 4 Compliance Deadline - December 31 ,2016
eoncJusiap:
The installation of SCR controls at the Bridger Plant remains on schedule and under budget.
Based on the 2015 SCR Analysis, the SCR investments continue to be the most cost-effective
means of ensuring that Units 3 and 4 comply with state and federal emissions regulations.
Further, the Company continues to believe that the Bridger Plant SCR investments represent
the lowest cost and least risk option for serving future customer demands.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 2nd day of September 2015 I served a true and
correct copy of the within 7th QUARTERLY REPORT FOR THE JIM BRIDGER
SELECTIVE CATALYTIC REDUCTION UPGRADE AT UNITS 3 AND 4, upon the
following named parties by the method indicated below, and addressed to the following:
Commission Staff X Hand Delivered
Don Howell _U.S. Mail
Deputy Attorney General _Overnight Mail
ldaho Public Utilities Commission _FA)(
472 West Washington (83702) X Email [e-mail]
P.O. Box 83720
Boise, ldaho 83720-007 4
lndustrial Gustomerc of ldaho Power _Hand Delivered
Peter J. Richardson X U.S. Mail
Gregory M. Adams _Overnight Mail
RTCHARDSON ADAMS, PLLC _FAX
515 North 27th Street (83702) X Email [e-mail]
P.O. Box 7218 [e-mail]
Boise, ldaho 83707
Dr. Don Reading _Hand Delivered
6070 Hi!! Road X U.S. Mail
Boise, ldaho 83703 _Overnight Mai!
-FAxX Email [e-mail]
_Hand DeliveredX U.S. Mail
ldaho Conservation League
Benjamin J. Otto
Idaho Conservation League
710 North Sixth Street
Boise, ldaho 83702
Snake River Alliance
Dean J. Miller
McDEVITT & MILLER LLP
420 West Bannock Street (83702\
P.O. Box 2564
Boise, ldaho 83701
CERTIFICATE OF SERVICE
Overnight Mail
FAxX Email [e-mail]
_Hand Delivered
X U.S. Mai!
_Overnight Mail
FA)(X Email [e-mail]
Ken Miller, Clean Energy Program Director
Snake RiverAlliance
P.O. Box 1731
Boise, ldaho 83701
*Hand Delivered
X U.S. Mail
.. . Overnight Mail
*FAX
_ X. Emai! [e-mail]
CERTIFICATE OF SERVICE