Deep Blue NRG Group: Energy in the room

Independence, Mo.

Independence Power and Light unveiled its plan Saturday to move from coal to a more diversified power supply due to EPA regulations and the age of its two coal plants.

“Do you have safe and reliable service at reasonable rates?” energy attorney Karl Zobrist asked the audience.

This question framed the discussion on energy options. Nearly a hundred people came to learn about the fates of the two coal power plants owned by the city of Independence: Blue Valley and Missouri City.

They heard from representatives from IPL, Indy Energy and the Sierra Club and then had the opportunity to voice their concerns.

IPL director Leon Daggett said it wants to go a more diverse route for energy sources in order for rates to remain stable. The plan is to retire the Missouri City plant in January 2016 and the Blue Valley power plant off of Truman Road in Independence will switch from coal to natural gas. No additional expense will be required to convert Blue Valley to use natural gas, he said, because the plant was originally designed for it.

Recent EPA regulations mandate that all U.S. coal power plants operate at a cleaner and more efficient level beginning this year. Jason White of Indy Energy said meeting this requirement will cost $105.5 million to upgrade both plants.

“Burning coal will be expensive,” White told the audience. “Potential costs to upgrade the plants to meet EPA regulations will be $27.1 million for Missouri City and $78.4 million for Blue Valley, bringing a total of $105.5 million.”

White said the costs were determined by a 2011 master plan update in which IPL outlined energy issues and options. The study revealed three developments: the cancellation or delay of over 100 coal-fired projects, declining natural gas prices and pending environmental requirements.

According to a December 2013 report by the Union of Concerned Scientists, a nonprofit advocacy group, as many as 329 coal-fired generators in the country are no longer economically competitive to operate.

“They are simply older, dirtier and underutilized compared to natural gas or wind power,” White said.

The UCS report also said the IPL plants are “ripe for retirement” with Missouri City being 59 years old and Blue Valley 51. The average life expectancy of a coal plant is 45 years, White said.

The IPL master plan also recommends to replace the two coal plants as well, citing output. It says the plants have an increasingly smaller role in meeting overall energy needs. Peaking at 38.2 percent in 2008, the plants only generate 10 or 11 percent of the city’s power today.

“Missouri City is a small plant that is used four months during the summer,” said Daggett. “The city’s power is 60 to 65 percent from two life-of-unit contracts through Iatan and NC-2 at 5.5 cents per kilowatt hour; 13 percent is from natural gas at the Dogwood Facility in Pleasant Hill and the rest are from spot purchases and renewable sources.”