Public Service Commission Orders Duke Energy Kentucky to Provide Information on Coal Plant Conversion

Strategic Insights -

The Public Service Commission of Kentucky has directed Duke Energy Kentucky, Inc. to provide detailed information regarding its plans to convert its Wet Flue Gas Desulfurization system from a quicklime reagent process to a limestone reagent handling system at its East Bend Generating Station. The conversion is intended to meet the new Environmental Protection Agency's (EPA) Mercury and Air Toxics Standard (MATS) Rule.

Key Takeaways:

  • Duke Energy Kentucky must provide capital costs for each workstream associated with the Wet Flue Gas Desulfurization unit to enable the East Bend Unit to meet the new EPA MATS Rule.
  • The company has considered the option of fuel switching or the application of other back-end technologies to meet the new EPA MATS regulations, but the associated costs are not specified.
  • The most recent supplier's magnesium enhanced lime (MEL) secondary response to Duke Kentucky's long-term MEL request for proposal is required to be provided.
  • The company must detail the modeling it utilized to analyze the 100 percent conversion to natural gas alternative of the East Bend Unit, as well as list any potential benefits or liabilities of such a conversion.
  • The estimated capital cost of the conversion project, previously listed as $125.8 million, has not changed despite a delay in the project.
  • The company's claim that the East Bend facility operated at a 5-year capacity factor of 61 percent is called into question, and updated cost savings are required to be provided.
  • Duke Kentucky must provide its assessment of the referenced EPA MATS ruling.
  • The company must explain the assumption that the duration of a long-term lime supply agreement may not provide a seamless transition to a Combined Cycle generator for East Bend.
  • The impact to ratepayers if the Limestone Conversion project is approved or denied must be provided.

Statistics:

  • January 6, 2025: The estimated capital cost of the conversion project was previously listed as $125.8 million in Case No. 2024-00152.
  • 61 percent: The previously claimed 5-year capacity factor of the East Bend facility, which is being questioned.
  • 49.45 percent: The 5-year average capacity factor provided by Duke Kentucky in its response to Commission Staff's First Request for Information, Item 15 (e), Attachment 2 in Case No. 2024-00152.

Sources:

  • Commonwealth of Kentucky Before the Public Service Commission, In the Matter of: Electronic Application of Duke Energy Kentucky, Inc. for a Certificate of Public Convenience and Necessity to Convert Its Wet Flue Gas Desulfurization System from a Quicklime Reagent Process to a Limestone Reagent Handling System at Its East Bend Generating Station and for Approval to Amend Its Environmental Compliance Plan For Recovery by Environmental Surcharge Mechanism (Case No. 2025-00002).
  • Electronic Application of Duke Energy Kentucky, Inc. for a Certificate of Public Convenience and Necessity to Convert Its Wet Flue Gas Desulfurization System from a Quicklime Reagent Process to a Limestone Reagent Handling System at Its East Bend Generating Station and for Approval to Amend Its Environmental Compliance Plan For Recovery by Environmental Surcharge Mechanism (Case No. 2024-00152).
  • Sierra Club's Redacted Rebuttal Testimony of Ranajit Sahu at 4 (Case No. 2024-00152).