why we made the decisions we made and where we are in building new generation february 17, 2005...
TRANSCRIPT
Why We Made the Decisions We Made
and
Where We Are in Building New Generation
February 17, 2005
Prepared by
Nilaksh Kothari, P.E.
General Manager
Manitowoc Public Utilities
February 17, 2005
2
OUTLINE OF PRESENTATION
OVERVIEW OF THE SYSTEM
THE PROBLEM/CONCERNS
POWER SUPPLY OPTIONS CONSIDERED
BENEFITS OF OWNING GENERATION
PROJECT STATUS
QUESTIONS
February 17, 2005
3
Facts in Brief-2003
Electric Utility Water Utility
Revenues $35,140,092 $4,748,813
Number of Customers
17,502 13,540
Units sold522,931 MWhs
2,917,478 kgals
Miles of Line/Mains
222.5 174.3
Average Net Investment
$54,242,542 $20,450,225
February 17, 2005
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Sources of Capacity Sources of Capacity -122 MW Total in 2004
Steam Generating Plant 70.0 MW Diesel 11.0 MW Combustion Turbine (Gas) 21.0 MW Market Purchases 20.0 MW
Age of Facilities / Capacity Boiler #5 50 Years / 15.0 MW Boiler #6 46 Years / 17.5 MW Boiler #7 38 Years / 17.5 MW Boiler #8 12 Years / 21.0 MW Diesel 17 Years / 11.0 MW Combustion Turbine 3 Years
(Refurbished) /20.5 MW Steam Turbine Generator #2 67 Years Steam Turbine Generator #3 62 Years Steam Turbine Generator #4 51 Years Steam Turbine Generator #5 46 Years Steam Turbine Generator #6 38 Years
February 17, 2005
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Sources of Energy
Sources of Energy – 2003 MPU Generation 292,133 MWH (55%)
– Steam 291,070– Natural Gas 36– Diesel 1,027
Market Purchases 242,392 MWH (45%)– WPPI 91,149– WPS 148,633 – WE Energies 2,588– Alliant 22
Purchased vs. Produced Energy (MWH): Purchased / Generated
2002 266,573 / 293,477 48/52 2001 292,769 / 264,189 53/47 2000 286,502 / 294,157 49/51 1999 302,768 / 255,168 54/46
February 17, 2005
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THE PROBLEM
MPU System Demand vs. Supply
60.0
80.0
100.0
120.0
140.0
160.0
180.019
86
1990
1994
1998
2002
2006
2010
2014
2018
Year
MW
s
Total System Demand Total Supply
ProjectedHistorical
February 17, 2005
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Concerns
Age of the existing facilities Boiler and generators > 50 years as compared to expected
life of 40-50 years Increased down time of equipment for maintenance
Boiler #5 Environmental concerns- notice of violation from DNR Requires special fuel, and is relatively expensive to
operate
Transmission constraints limit import capability Regional and Statewide Interconnect through the Shoto Substation limited to 55
MW (summer)
Wholesale purchased capacity not reasonably available MPU’s average cost of generation is higher than the
cost of purchased power
February 17, 2005
8
Energy Production Costs - Existing
Equipment Operating Cost
$20.78 $23.54 $23.54$32.08
$54.21$60.38
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
Boiler 8 Boiler 6 Boiler 7 Boiler 5 RecipGenerator
CombustionTurbine
Var
iab
le O
per
atin
g C
ost (
$/M
WH
)
Weighted Average Generation Cost = $34.94
2001 Purchased Power Cost = $30.93
February 17, 2005
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Power Supply Options Considered (2000-2002)
Existing Generation Resources
1. MPU Steam Plant Improvements
2. MPU Steam Plant Package Boiler
3. MPU Peakers
Capacity and Energy Proposed to MPU
4. McCartin Group Manitowoc steam plant
5. Dominion Evantage peakers
6. Dynegy
7. Xcel Energy
8. Dairyland Cooperative
9. WE Energies
10. Capacity and Energy Proposals to GLU
Potential Lease Options11. Edison Mission
12. FPLE/Tenaska
13. Dominion Thermal
Potential Self Build Options14. 34 MW combustion
turbine(CT)
15. 80 MW combustion turbine(CT)
16. 80 MW combined-cycle unit
17. MPU Plant Expansion
18. Other Independent Power Producers
February 17, 2005
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Factors Considered in Evaluation of Options
Demand and energy forecast Assessment of existing facilities Management/diversification of power supply portfolio Capital, operating and maintenance costs Minimize MPU’s generation costs/competitive electric rates Maximize use of existing site Financing feasibility Account for uncertainties/trends
Retail deregulation Environmental regulations Transmission constraints Role of Regional Transmission Organizations Wholesale market transition
February 17, 2005
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0102030405060708090
100
$ per
Meg
awat
t-hou
r
Boiler 9 Boiler 8 Boiler 6 Boiler 7 Boiler 5 Recip C.T.
Average Purchased Power Cost (2003 $) = $38.97
Average cost of generation (2006 $) = $24.73
Projected Energy Cost Saving
February 17, 2005
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The 63.3 MW expansion at the existing site results in the lowest rate impact to MPU’s customers of all alternatives
Reduces air emissions per megawatt produced by one-third
Utilizes existing CFB technology (same as Boiler 8): With Boiler 8, provides all of MPU’s baseload energy
requirements at an average variable cost of $15-18 per MWH Like Boiler 8, burns a wide range of fuels allowing more
options to stabilize operating costs Minimizes reliance on wholesale electricity markets that
experience price volatility due to forces outside MPU’s control
Removes reliance on transmission system for power imports
Keeps money from MPU’s ratepayers in Manitowoc Significantly increases MPU’s payment in lieu of taxes Maintains jobs in Manitowoc and provides infrastructure
for economic development
Benefits of Power Plant Expansion