Wisconsin Utility Wants to Build 650-Megawatt, Gas-Fired Generator

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Wisconsin Power & Light Company (WPL) (Madison, Wisconsin), a unit of Alliant Energy Corporation (NYSE:LNT) (Madison), plans to seek regulatory approval this quarter to build a 650-megawatt (MW), natural gas combined-cycle (NGCC) unit addition at its Riverside Energy Center near Beloit, Wisconsin. If the project is approved by Wisconsin utility regulators, construction could kick off in early 2016, and the plant could be operating by early 2019.

WPL expects to select an engineering, procurement and construction (EPC) firm for the project in early 2016. The new unit would offset retirement of up to 690 MW of aging coal- and gas-fired generation, WPL spokesman Scott Reigstad told Industrial Info.

At an estimated cost of between $725 million and $775 million, plus transmission line costs, the proposed unit addition at Riverside would be the largest single piece of WPL's $1.4 billion, five-year capital budget, announced in mid-2012. A good bit of that budget has been earmarked for environmental equipment retrofits, including:

• Installation of a sulfur dioxide (SO2) scrubber at Unit 5 of its Edgewater Generating Station, located in Sheboygan, Wisconsin. That $300 million project, under construction now, is scheduled to be finished in 2016.
• Installation of a SO2 scrubber and carbon injection system to capture mercury at units 1 and 2 of its Columbia Energy Center in Portage, Wisconsin. That $600 million project became operational last July.
• Installation of selective catalytic reduction (SCR) equipment to lower emissions of nitrogen oxides (NOx) at Unit 2 of Columbia Energy Center. The $150 million project, proposed last July, is slated to cut NOx emissions by 50%. The retrofit project has not yet been approved by Wisconsin utility regulators, but if they give WPL the go-ahead, the utility plans to begin construction in 2016 and finish in 2018.
• Later this year, WPL plans to kick off a project to upgrade the coal pulverizers and steam turbines at the Columbia Energy Center. The $130 million project will take place during planned outages at that plant. Work is scheduled to wrap up on those upgrades by 2017.

"The main reason we want to build the unit addition at Riverside is to replace older, coal-fired generation that we have decided to close or that we may close," WPL spokesman Reigstad said in an interview. "We're not seeing a lot of electric demand growth."

WPL had decided to retire the following units:

• Units 1 and 2 of the Nelson Dewey Power Station in Cassville, Wisconsin. Those units total about 200 MW of generating capacity.
• Unit 3 of the Edgewater facility, which has a nameplate capacity of 60 MW.
• Units 3, 4, 5 and 6 of the Rock River Power Station in Beloit. Those four gas-fired, combustion turbine peaking units were built in the 1960s and 1970s. Their total capacity is about 200 MW, Reigstad said.

If Wisconsin regulators give the utility the OK to add a unit to its Riverside Energy Center, Reigstad said WPL will retire Unit 4 of the Edgewater plant by the end of 2018. WPL owns about 225 MW of that 330 MW unit. Another Wisconsin utility, Wisconsin Public Service Company (Green Bay, Wisconsin), a unit of Integrys Energy Group (NYSE:TEG) (Green Bay, Wisconsin), owns the balance of Edgewater Unit 4.

Adding a new NGCC unit at Riverside "provides significant environmental benefits to Wisconsin, brings hundreds of construction jobs to the state and delivers an economic boost to the region," said Patricia Kampling, Alliant Energy's chairman, president and chief executive officer, when announcing plans to build the plant last November. The utility also is considering adding renewable generation at the Riverside Center, but no technologies or timelines have been chosen.

WPL also is considering the addition of 150 MW of new generation at its Sheboygan Falls Energy Center by converting two combustion turbine units there to combined-cycle generators. If that $150 million project passes internal reviews, construction could begin in 2018 and wrap up in 2019.

"Like many utilities, particularly those in the Midwest, WPL is implementing plans to modify its generating portfolio to comply with tougher environmental regulations," said Brock Ramey, Industrial Info's research manager for North American Power. "While advocates of renewable energy and energy efficiency likely will oppose WPL's plans, the reality is the utility needs new sources of baseload generation, which wind turbines, solar panels and customer programs cannot reliably provide."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.