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GRDA board approves resource plan calling for new 400-MW natural gas-fired plant


From the August 22, 2013 issue of Public Power Daily

Originally published August 22, 2013

The Grand River Dam Authority’s board has approved an electric generation resource plan that includes construction of a new 400-megawatt combined-cycle gas plant as part of an effort to meet both the growing demand of its Oklahoma customer base and new Environmental Protection Agency regulations. The plan would allow for an increase in both GRDA’s gas and wind generation capacity that would eventually replace the output from Unit 1 at the GRDA coal-fired plant.

"We do have some very real deadlines ahead of us in regards to EPA regulations and customer demands," said GRDA Chief Executive Officer/Director of Investments Dan Sullivan. "I want to commend our board for giving so much time and effort to this issue already and for the decision today that allows GRDA to move toward these important goals."

Greg Grodhaus (left) and Chris Meyers take part in the Aug. 14 meeting of the GRDA board of directors at which the board voted to proceed with a plan to develop a 400-MW combined-cycle power plant. Photo courtesy of GRDA
"Today, approximately 45 percent of GRDA’s total generation capacity comes from our coal units," said Sullivan. "However, as this plan is put into place and we are able to add wind and gas generation, coal will go to about 17 percent."

Sullivan said the remaining coal generation will come from Unit 2 following a project to retrofit/upgrade its air quality control equipment. In operation since 1985, the unit is already equipped with the state’s only flue-gas desulfurization (scrubber) to remove sulfur emissions following the coal combustion process, the utility said. The scrubber will remain in service through the upgrade effort and GRDA said it will convert other existing air quality control equipment to meet the latest EPA standards. The deadline for those standards is April 2016, but GRDA is planning to have the upgrades completed by December 2015.

As its reliance on coal goes down, GRDA said it will be able to bring greater balance to a generation portfolio that already provides a beneficial and diverse mix of resources. Though hydroelectric output will not change significantly with the new plan, gas generation will go from 25 percent of total capacity to 45 percent. GRDA also plans to increase its wind generation from approximately 3 percent of total capacity today to 13 percent in the future.

"This resource mix really gives GRDA the options it needs to maintain reliability — and efficiently — and that’s in the best interest of our ratepayers," said Sullivan.

GRDA also plans to work with its customers to develop new demand management programs and incentives. "There may be things we can do to shift those periods of the day when electric usage is the highest," said Sullivan. "By implementing financial incentives for electric demand management, and working with our customers to shift usage patterns where possible, we will see this future resource mix work efficiently and reliably for many years to come."

The board’s decision came a day after Oklahoma Gov. Mary Fallin announced that she is suspending a task force designed to study GRDA’s operations. Fallin said she still supports the mission of the task force, but its work might unintentionally and negatively affect the state-owned utility’s future bond ratings.

GRDA board members previously delayed voting on the new power plant at Fallin’s request. Fallin said she is now satisfied that GRDA leadership has done due diligence and is able to make an informed decision. "The GRDA is an important agency that is doing some great work in Northeastern Oklahoma," she said. "It’s providing affordable power to a large community that creates jobs and grows our economy. But like every area of government, we know there are improvements to be made."
 

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