Power play: Rising global warming concerns mean utilities face more obstacles to plans for new coal plants

Judy Newman
608-252-6156
March 29, 2008

Barbara Swan knows that the idea of building an $850 million to $950 million power plant fueled primarily by coal is not an easy sell right now.

"If I had my druthers, would this be the time I 'd be trying to build a new baseload plant? No, " said Swan, president of Wisconsin Power & Light, Madison. "But we have an obligation as a utility to provide reliable, affordable power to our customers in as environmentally responsible a way as we can. The need for the power from this plant is not going to go away. "

WPL 's application to build a 300-megawatt, coal-fired power plant along the Mississippi River at Cassville, 100 miles southwest of Madison, is working its way through the regulatory process just as concerns over global warming are heating up.

At least one opponent speculates that state regulators may give the project a thumbs-down.

"The writing is on the wall and the public sees it, " said Jennifer Feyerherm, head of the Wisconsin Clean Energy Campaign for the Sierra Club. "We simply cannot afford new coal plants, in terms of economics, health advisories and global warming. "

A growing concern

Here 's the dilemma: Wisconsinites are using more and more electricity. Utilities try to fill that growing need, in part, by building more power plants. Coal is a relatively inexpensive fuel, so the state 's coal and nuclear plants run 24 hours a day. More costly natural gas-fueled plants operate when electricity demand rises.

But coal-fired power plants are believed to be a big factor in the types of pollution blamed for smog, global warming and mercury contamination.

And the public is growing worried. According to a 2007 New York Times/CBS News poll, 90 percent of Democrats, 80 percent of independents and 60 percent of Republicans said immediate action is needed to curb global warming.

Three major investment banks, Citigroup, J.P. Morgan Chase & Co. and Morgan Stanley, announced new standards in February that will make it harder for utilities to win financing for new coal plants, and the U.S. Agriculture Department earlier this month suspended a low-interest loan program to help rural electric cooperatives build coal-fired power plants.

In Wisconsin, a governor 's task force is working on recommendations to address global warming. The state Department of Natural Resources is already considering limits on mercury emissions while in Washington, D.C., Congress is considering more than half a dozen bills to limit other types of air pollution, mainly carbon dioxide.

At the very least, the proposal will face some of the toughest scrutiny ever for a project of its type, said Timothy Le Monds, spokesman for the state Public Service Commission, the three-member panel that will act on the application by the end of this year.

"As far as approving a coal-fired power plant, this will be the most extensive analysis that we 've done, just based on the greenhouse gas emissions and some of the issues with global warming and environmental impact, " Le Monds said.

"The public perception is that it 's a foregone conclusion (the power plant) will be built; the question is where. People forget that we do have the authority to deny it as well, " he said.

Addressing the need

The main point the PSC will have to decide: Is another 300-megawatt, continuous-use power plant needed or are there other ways to satisfy the growing appetite for electricity?

"That 's the $64,000 question, " said Robert Norcross, administrator of the PSC 's gas and energy division.

Swan said WPL has been working on plans for the power plant for three or four years. "Our load has been continuing to grow at a level of about 2 percent to 3 percent a year, " she said, even with energy conservation efforts that have reduced use by customers involved in those projects by 1 percent.

The last coal-fired power plant for WPL was the Edgewater Unit 5 at Sheboygan, built in 1985. The Madison utility company, part of Alliant Energy Corp., Madison, has added natural gas-fueled plants and wind energy, but still buys at least 30 percent of its electricity from other sources, Swan said. "What we really need in our mix is baseload, " she said.

Three other coal-fired plants have begun construction in Wisconsin in recent years. We Energies, Milwaukee is building the largest. Its two generators at Oak Creek will each produce 615 megawatts, for a total of 1,230 megawatts. Madison Gas & Electric, Madison, and Wisconsin Public Power Inc., Sun Prairie, will each own 100 megawatts from that plant. Unit 1 is scheduled to start operating in 2009, Unit 2 in 2010.

Wisconsin Public Service Corp., Green Bay, built a 583-megawatt coal-fueled plant at Weston, near Wausau, which started trial runs recently. And Manitowoc Municipal Utilities built a 63-megawatt plant that went into service in 2006.

WPL 's project would be smaller than those at Oak Creek or Weston but it will probably get more PSC attention, Norcross said. "Global warming issues are probably hotter now " than they were a few years ago, when the other plants were up for approval, he said.

Facing opposition

WPL hopes to mitigate some concerns over a new coal plant by using waste wood, corn stalks and switchgrass for up to 10 percent of the fuel, to start with, maybe 20 percent eventually. But it would take a lot.

"We need (to contract for) 310,000 to 436,000 acres in order to support that biomass component for the plant. And right now, that market doesn 't exist, " Swan said. Discussions are under way to sign up providers within a 50-mile radius of the plant.

Sierra Club 's Feyerherm said 10 percent biomass is not enough. She cited a heating and cooling plant in St. Paul, Minn., that uses primarily wood waste.

"Where there 's a will, there 's a way, " she said.

In order to burn the biomass, WPL wants to employ "fluidized bed " technology, in which limestone is used to liquify the coal during combustion. But that 's worse than other types of coal-burning plants, said Mark Redsten, executive director of Clean Wisconsin.

"This plant (would be) highly inefficient, very expensive and would produce more greenhouse gases than a 40-year old (power) plant, " said Redsten. Clean Wisconsin, the Citizens Utility Board and RENEW Wisconsin have been granted a total of more than $200,000 to hire experts to oppose the plant in PSC hearings.

"We just hope our expert testimony and our intervention before the PSC will show that this power plant is not a good investment for Wisconsin, " Redsten said.

Swan said the new plant, combined with equipment to reduce pollution at the two existing 100-megawatt coal-fired generators at Cassville, would reduce total emissions of nitrous oxide, sulfur dioxide and mercury at the site. However, carbon dioxide, a key element in global warming, would be increased by 40 percent.

WPL wants to build the plant at Cassville but suggests the Columbia power plant near Portage as a possible alternative. In written comments to the PSC, Cassville area residents almost uniformly support the project while citizens from other parts of the state, including Madison, urge against approving it.

The PSC this month voted to extend its six-month review of the application for another six months. A decision is expected by mid-December.

Opponents say they hope Wisconsin 's PSC will follow the lead of Kansas officials who cited carbon dioxide emission as the reason for turning down an air permit for a proposed coal-fired power plant in that state last October. The Sierra Club says 63 proposed coal-fired power plants have been stopped through legal or regulatory means or abandoned by developers.

"In state after state, public utility commissions and regulators are saying no to new coal plants. For Alliant to be building an expensive, inefficient coal plant is a bad idea for the environment and a bad idea for the ratepayers of Alliant, " Redsten said.

WISCONSIN'S NEWEST COAL-FIRED POWER PLANTS

Proposed and under
construction:

Weston plant

Utility: Wisconsin Public Service Corp., Green Bay

Electricity generated: 583 megawatts

Completion date: Summer 2008

Manitowoc plant

Utility: Manitowoc Public Utilities

Electricity generated: 63 megawatts

Completed: Nov. 2005

Oak Creek plant

Utility: We Energies, Milwaukee

Electricity generated: 2 units at 615 megawatts each

Completion dates: Unit 1 - 2009; Unit 2 - 2010

Proposed WPL coal plant

Proposed by: Wisconsin Power & Light, Madison

Proposed site: Cassville (alternative site: Portage)

Electricity generated: 300 megawatts

Completion date: 2013

Timetable

• Draft environmental impact statement:
April or May 2008

• Public comments accepted for 45 days following release of draft EIS.

• Final environmental impact statement: Late summer

• Public hearings to follow that.

• Wisconsin Public Service Commission decision on
construction and location of plant: Dec. 2008

• If approved, construction to begin: Early 2009