DNREC Presentation 3/ 9/ 06 Items to Discuss About Dover Correct - PDF document

City of Dover McKee Run Unit 3 DNREC Presentation 3/ 9/ 06

Items to Discuss � About Dover � Correct a Couple Issues � Look at Technology � Look at the Impacts

About Dover � Dover owns two sites McKee Run and VanSant � City Owns-Duke Energy Operates. � McKee Run has Units 1/ 2, 3 � McKee Run 3 � Newest and most efficient unit � Caps price for Dover customers � Capacity factor of less than 8% (2005) � Critical for Restoration of Dover and DAFB

About Dover � McKee Run 3 � Residual oil (No 6) � Natural gas � 75% of production costs are Fuel

About Dover World Spot Crude Oil Price per Barrel $70.0 � McKee Run 3 $60.0 � Residual oil (No 6) $50.0 � Natural gas $40.0 $30.0 � 75% of production $20.0 costs are Fuel $10.0 $0.0 Jan-99 Apr-99 Jul-99 Oct-99 Jan-00 Apr-00 Jul-00 Oct-00 Jan-01 Apr-01 Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06

About Dover Commercial Natural Gas prices (dollars per 1000 cu ft) $16.00 � McKee Run 3 $14.00 � Residual oil (No 6) $12.00 � Natural gas $10.00 $8.00 � 75% of production $6.00 costs are Fuel $4.00 $2.00 $0.00 9 9 0 0 1 1 2 2 3 3 4 4 5 5 9 9 0 0 1 1 2 2 3 3 4 4 5 5 9 0 0 0 0 0 0 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - - - - - - - - - - - - - - - - - - - - - - - - - - - - r t r t r t r t r t r t r t n l n l n l n l n l n l n l u c u c u c u c u c u c u c p p p p p p p a O a O a O a O a O a O a O A J A J A J A J A J A J A J J J J J J J J

Correct a Couple Issues � Regulated?

Correct a Couple Issues � Regulated? � Emission Rates

In the January DNREC Presentation SOx Controls - Mercury Controls - Unit (year NOx Controls - Current Emission Current Emission Current Emission built) Age Fuel Rate Rate Rate First generation low NOx burners & Indian River overfire air - Uncontrolled - 1 (1957) 48 Coal 0.38 lb/mmbtu 2.2 lb/mmbtu Uncontrolled First generation low NOx burners & Indian River overfire air - Uncontrolled - 2 (1959) 46 Coal 0.33 lb/mmbtu 2.1 lb/mmbtu Uncontrolled First generation low NOx burners, overfire air & selective non-catalytic Indian River reduction - Uncontrolled - 3 (1970) 35 Coal 0.28 lb/mmbtu 2.2 lb/mmbtu Uncontrolled First generation low NOx burners, overfire air & selective non-catalytic Indian River reduction - Uncontrolled - 4 (1980) 25 Coal 0.30 lb/mmbtu 1.0 lb/mmbtu Uncontrolled EdgeMoor 3 Selective non-catalystic reduction - Uncontrolled - (1954) 51 Coal 0.17 lb/mmbtu 1.01 lb/mmbtu Uncontrolled First generation low NOx burners & gas EdgeMoor 4 reburn - Uncontrolled - (1966) 39 Coal 0.18 lb/mmbtu 1.04 lb/mmbtu Uncontrolled Residual First generation low NOx burners - Uncontrolled - EdgeMoor 5 32 Oil NA (1973) 0.35 lb/mmbtu 0.60 lb/mmbtu Reported to First generation low NOx burners & be 2002 data McKee Run Residual overfire air - Uncontrolled - 3 (1975) 30 Oil 0.35 lb/mmbtu 0.73 lb/mmbtu NA

Dover Corrected Emission Rates SOx Controls - Mercury Controls - Unit (year NOx Controls - Current Emission Current Emission Current Emission built) Age Fuel Rate Rate Rate First generation low NOx burners & Indian River overfire air - Uncontrolled - 1 (1957) 48 Coal 0.38 lb/mmbtu 2.2 lb/mmbtu Uncontrolled First generation low NOx burners & Indian River overfire air - Uncontrolled - 2 (1959) 46 Coal 0.33 lb/mmbtu 2.1 lb/mmbtu Uncontrolled First generation low NOx burners, overfire air & selective non-catalytic Indian River reduction - Uncontrolled - 3 (1970) 35 Coal 0.28 lb/mmbtu 2.2 lb/mmbtu Uncontrolled First generation low NOx burners, overfire air & selective non-catalytic reduction - Uncontrolled - Indian River 25 Coal Uncontrolled 4 (1980) 0.30 lb/mmbtu 1.0 lb/mmbtu EdgeMoor 3 Selective non-catalystic reduction - Uncontrolled - (1954) 51 Coal 0.17 lb/mmbtu 1.01 lb/mmbtu Uncontrolled First generation low NOx burners & gas EdgeMoor 4 reburn - Uncontrolled - (1966) 39 Coal 0.18 lb/mmbtu 1.04 lb/mmbtu Uncontrolled EdgeMoor 5 Residual First generation low NOx burners - Uncontrolled - (1973) 32 Oil 0.35 lb/mmbtu 0.60 lb/mmbtu NA First generation low NOx burners & 2004 actuals McKee Run Residual overfire air - Uncontrolled - posted on 3 (1975) 30 Oil 0.28 lb/mmbtu 0.73 lb/mmbtu NA web by DNREC

2003 Overfire Air NOx Project � City of Dover financed $2M in a NOx reduction project to comply with CAA reduction. � Reduced emission rate from 0.35 to 0.28 average (0.23 lowest) � 20 - 35% reduction

2003 Overfire Air NOx Project � City of Dover financed $2M in a NOx reduction project to comply with CAA reduction. � Reduced emission rate from 0.35 to 0.28 average (0.23 lowest) � 20 - 35% reduction

2003 Overfire Air NOx Project � City of Dover financed $2M in a NOx reduction project to comply with CAA reduction. � Reduced emission rate from 0.35 to 0.28 average (0.23 lowest) � 20 - 35% reduction

2003 Overfire Air NOx Project � City of Dover financed $2M in a NOx reduction project to comply with CAA reduction. � Reduced emission rate from 0.35 to 0.28 average (0.23 lowest) � 20 - 35% reduction

Correct a Couple Issues � Regulated? � Emission Rates � Coal and Oil

From Air Quality Summit June 4, 2003

Actual Emissions SO2 Emissions from M ulti-P Targeted Units 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2002 2003 2004 2005 Data from EPA Website

Actual Emissions NOX Emissions from M ulti-P Targeted Units 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2002 2003 2004 2005 Data from EPA Website

Actual Emissions M ercury Emissions from M ulti-P Targeted Facilities 250.0 200.0 150.0 100.0 50.0 0.0 2002 2003 2004 Data DE TRI Reports.

Actual Emissions – 2003 TRI Report � 2003 is most recent report � Data taken from State Website http: / / www2.state.de.us/ serc/ information/ TRI/ 2003/ TRI_Data_Detail_Report.shtml

Actual Emissions – 2003 TRI Report � 2003 is most recent report � Data taken from State Website http: / / www2.state.de.us/ serc/ information/ TRI/ 2003/ TRI_Data_Detail_Report.shtml

Actual Emissions – TRI Report

Includes all three McKee Units Actual Emissions – TRI Report

Items of Interest � About Dover � Correct a couple issues � Look at Technology � Look at the Impacts

In the January DNREC presentation

In the January DNREC presentation

In the January DNREC presentation N/ A

For Dover it’s NOx and SOx � NOx � Overfire air – done $2M � SCR � SNCR � SO2 � Lower sulfur fuel

Items of Interest � About Dover � Correct a couple issues � Look at Technology � Look at the Impacts

For Dover it’s NOx and SOx � NOx � SCR � No oil units w/ SCR in service � Metals poisoning of catalyst � Brings ammonia on-site � Estimated capital cost > $10M � SNCR � Brings ammonia on-site � Estimated capital cost $4M

For Dover it’s NOx and SOx � NOx – SCR - $10M capital � Assume similar run history � Assume O&M costs $300K (catalyst and NH 3 ) � 28% premium over current costs.

For Dover it’s NOx and SOx � NOx – SNCR - $4M capital � Assume similar run history � Assume O&M costs $ 150K (NH 3 ) � 12% premium over current costs.

For Dover it’s NOx and SOx � SO2 � Lower Sulfur fuel � Used 3% oil until 1992 � Currently use 1% sulfur � Lower sulfur available at 10% premium � Fuel is 75% of our production costs � 7.5% premium over current costs

For Dover it’s NOx and SOx � Total cost estimates � NOx –> 12% – 28% � SOx -> 8% � 20% - 36% for this regulation

Items of Interest � About Dover � Correct a couple issues � Look at Technology � Look at the Impacts � Multi-pollutant – (20% - 36% ) � CO2 – (?) � Combustion Turbine (?) � Regional Haze Reg - Particulate (?) � Other ?

Dover Summary Switched from Coal to Oil in 1970’s Switched from 3% to 1% in 1990’s Installed NOx OFA NOx Reduction in 2003 Faced with 100% fuel cost increase Faced with compounded Environmental Regulations Probably forced to shut down

Dover’s Electric Strategy Wholesale Power Purchaser Plant Caps our costs Not Base loaded – Seasonal – less than 2000 hrs. DAFB and State Government are two largest customers Fuel cost increases provide current sticker shock

Dover’s Electric Strategy Black start capability McKee Run is critical link Dover service territory (Local, State, regional medical, DAFB)

Any Questions?