Consultant: $35M will make Sims plant 'safe, reliable'

Alex Doty • Jun 26, 2018 at 10:00 AM

A consultant’s evaluation of the Board of Light & Power’s 35-year-old Sims III power plant has been released, and the study notes that the local utility has arrived at a “fork in the plant’s life” regarding its future.

“One fork requires an investment in excess of $35 million to bring a coal-fired power plant with old technology, uncompetitive heat rates and increasing environmental regulations back to a safe and reliable status,” the report from Black & Veatch states. “The second fork requires an investment which will bring Grand Haven customers new high-efficiency, reliable and renewable generation technologies.”

Black & Veatch was tasked in April with analyzing the plant to identify what needs to be done, as well as the costs, in shutting down the plant. The consulting firm was the original design engineer of record for this unit when it was installed in 1983. Additionally, Black & Veatch continuously monitors the operation of the facility through the Monitoring and Diagnostic (M&D) services program, which was initiated in 2016.

The consulting firm reviewed historic plant operation and maintenance data, performed an on-site walkthrough, and met with plant staff as part of the process.

“Black & Veatch confirms that many of the critical plant equipment and sub-components have become obsolete and worn to the point of needing replacement and ... inspection and test reports are old and may not be representative of the equipment’s current condition,” the report indicates.

An estimated investment of $35 million would be required for continued safe and reliable operation of Sims III, the study notes, and “continued operation in the current condition without taking corrective action will increase the risk of possible equipment and/or catastrophic failure, which could cause serious injury or death to personnel and long-term loss of generation.”

Black & Veatch further recommends any future investments in the plant be minimized, and that it be shut down by 2020 for reasons including:

— Unit III has reached the end of its useful life, requiring significant investment to continue safe and reliable operation.

— About $35 million will be required, and costs will have exceeded any benefits of life extension since this unit is more expensive to operate than available alternatives.

— More economical power supply options exist that would drastically improve future electric prices for ratepayers and increase electrical reliability. Options include market purchases and even internal generation capability.

— The BLP will be able to take advantage of lower staffing levels through attrition, minimizing adverse effects to plant employees.

— Environmental compliance costs can be avoided with the Coal Combustion Residuals Rule and the upcoming Effluent Limitations Guidelines.

— The next turbine overhaul, scheduled for 2020, can be avoided, along with both the replacement of 480-volt and 4,160-volt electrical equipment, which will take approximately 36-48 months to purchase and install, and the boiler and scrubber controls which need replacement but will also require long lead times and a long outage.

The study notes that if the BLP wants to own and control some of its own power generation, it is recommended that the utility consider smaller, flexible generation technologies such as aeroderivative gas turbines or reciprocating internal combustion engines. 

“These technologies would give GHBLP the flexibility to quickly come online and match load as required to meet demand while minimizing reliance on external sources,” the report notes.

BLP Administrative Services Manager Renee Molyneux says the report is available for the public to view on the local utility’s website, ghblp.org. It has also been distributed to the BLP Board of Directors and Grand Haven City Council.

A joint meeting between the BLP trustees and City Council will take place at 6 p.m. Wednesday at the Grand Haven Community Center, in which Black & Veatch will present their findings and answer any questions from the two boards regarding the report.

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