Dave DeWitte, CR Gazette –
Interstate Power and Light Co.’s tentative plan to build a $700 million natural gas combined cycle power plant is looking less and less tentative.
Alliant Energy terminated plans to build a $1.5 billion coal-burning power plant in Marshalltown in January 2010. The project had been approved by the Iowa Utilities Board, but with some big strings attached, including requirements for major investments in renewable energy.
The Cedar Rapids-based utility division of Alliant Energy has indicated its unlikely to renew its agreement to purchase much of its power from the Duane Arnold Energy Center, a nuclear plant near Palo, when a power purchase agreement with NextEra Energy expires in February 2014.
Interstate Power and Light is conducting due diligence and planning a 600-megawatt power plant, Chairman William Harvey told analysts earlier this month. The due diligence process includes analysis of potential sites.
The plant would “be a sister” to the 550-megawatt Emery Generating Station Alliant built near Mason City in 2004, Interstate Power and Light spokesman Ryan Stensland said.
“It’s a model we know,” Stensland said. “We know how it’s built, how it’s designed and engineered, and it’s proven on the market to be reliable and efficient.”
Combined cycle squeezes more electricity out of each unit of natural gas than conventional single-cycle gas turbines by recapturing much of the heat from steam that has already gone through the turbine.
The plant would be slightly higher in output than utility’s Emery Generating Station in Cerro Gordo County, at about 600 megawatts.
Stensland said Interstate Power and Light still hasn’t decided whether to seek regulatory approval for the plant, because it is awaiting the outcome of a recent call for proposals from outside companies to supply equivalent power generation needs.
Proposals could include offers to sell an existing power plant or to supply the utility with power from an existing power plant.
A Cedar Rapids energy consultant who was supportive of the utility’s plans for a new coal plant isn’t as happy with the natural gas proposal, but is not dismissive of it.
Natural gas prices have collapsed in recent years, consultant Bob Latham said, and could remain low for some time because of new natural gas discoveries and new fracking technology for extracting more natural gas from older fields.
“It’s simply following the logic of what the market will do,” Latham said. “It’s about as safe as you can get.”
One advantage of a natural gas power plant is that power production can be ramped up quickly when operating it beomes more economical than buying power off the grid, and tapered off when natural gas costs or other factors make its output more expensive than grid power.
Latham said his main concern is that natural gas prices can rise and fall sharply. If the United States remains in a prolonged period of low natural gas prices, he said distributors will produce facilities to liquefy the natural gas and ship it to overseas markets where prices are higher.
“I hate to put everything into that basket of natural gas,” Latham said.
Stensland said the utility already gets about 50 percent of its electricity from coal-fired power plants, and “in a carbon-constrained economy, we’d be better positioned with natural gas than coal.”
Stensland declined to specify potential locations for the plant. He said the site would have to be close to one or preferably two natural gas pipelines, a source of water for steam, and the high-voltage transmission grid. Some existing Interstate Power and Light plants are possible sites, Stensland said.
Wisconsin Power and Light, the Wisconsin-based sister utility of Interstate Power and Light, has asked Wisconsin utility regulators for permission to buy an existing 600-megawatt natural gas combined cycle power plant in that state.
It’s unlikely Interstate Power and Light ratepayers would begin getting higher bills to pay for a new natural gas plant until early 2014. That’s when a three-year rate freeze agreement with the Iowa Utilities Board ends. The sister company is also expected to end its nuclear power purchases from Dominion Resources.
Interstate Power and Light expects to make a decision whether to pursue the new plant in May or June. If the decision is to go ahead, it would file for regulatory approval in August or September.
1 thought on “Natural gas power plant appearing more likely for Interstate Power”
I think that plant south of Mason City is all natural gas. Seems to be pretty clean. But from what I heard it uses a lot of water for cooling. That’s why they wanted to build it there because of the under ground river under it. I hope it don’t affect the lake with the drought.