BEFORE THE
ILLINOIS POLLUTION CONTROL BOARD
AMEREN ENERGY GENERATING
COMPANY,
v.
ILLINOIS ENVIRONMENTAL
PROTECTION AGENCY
Petitioner,
)
)
)
)
)
)
)
)
)
)
Respondent. )
PCB 09-38
(Thermal Demonstration)
PRE-FILED TESTIMONY OF JAMES
L.
WILLIAMS, JR.
I.
My name is James
1.
Williams, Jr. and I am presenting this testimony on behalf
of Ameren Electric Generating Company ("Arneren"). I am employed by Arneren as the Plant
Manager at the Coffeen Station. I have served in this capacity since 200 I. I am responsible for
the safe operation
of Coffeen Station.
2.
Arneren has filed its Petition to Modify Specific Thermal Standard ("Petition")
asking the Illinois Pollution Control Board ("Board") to modify the specific thermal standard
applicable to
Ameren's heated effluent discharge from the Coffeen Station to Lake Coffeen in
the calendar months May and October. My sworn affidavit dated December 10, 2008 was
attached to the Petition as Exhibit
5. I incorporate my December 10,2008 affidavit as my pre-
filed testimony in this matter except as otherwise updated herein. Additionally, the sworn
affidavit
of Michael
1.
Menne dated December 10, 2008 was attached to the Petition as Exhibit
10. I have personal knowledge and can testify competently as to the matters described in Mr.
Electronic Filing - Received, Clerk's Office, May 12, 2009
Menne's December 10,2008 affidavit, and therefore, I adopt Mr. Menne's affidavit as my pre-
filed testimony in this matter.
3.
Coffeen Station made its thermal demonstration in 1982. The specific thermal
standard established in the 1982 thermal demonstration remains in effect today and serves
as the
basis for Coffeen's present thermal limits. Attachment 1 depicts graphically the presently
applicable thermal limits.
4.
Arneren is seeking to modify the specific thermal standard to increase the thermal
limits for the calendar months
of May and October. Coffeen Station is not able to comply at all
times with the monthly average thermal limit for the months
of May and October without de-
rating its units or otherwise affecting operational availability. This is true for unseasonably
warm days toward the end
of May and in the beginning of October. At these times, the "winter"
thermal limits apply while ambient temperatures are transitioning to or from summer
temperatures. The need for relief is greater now than
it has been in the past due to more frequent
high summer temperatures, especially in periods
of low lake levels. Attachment 2 depicts
graphically the thermal limits Ameren is requesting
in this proceeding.
5.
This issue is not new for Coffeen Station. In 1997, it sought and obtained relief
from the thermal limits for May and October in the form
of a temporary variance. The 1997
variance set the thermal discharge standard for Coffeen Station to not exceed "
105 degrees
Fahrenheit
as a monthly average from May though October, and 112 degrees Fahrenheit as a
maximum for more than 3%
of the hours during that same period." As a condition of that
variance, Central Illinois Public Service Company (
"CIPS") was required to conduct studies and
collect data regarding the effects
of the Station's thermal discharge on the lake's fishery. The
variance also contained a condition providing for termination
of the variance if the Illinois
2
Environmental Protection Agency ("Agency") the Illinois Department of Natural Resources
(
"IDNR") determined that the variance was causing an adverse impact to the lake. The Station
operated under the variance for two years before a fish kill led to its termination
in 1999.
6.
As a result of the 1999 fish kill, and two smaller fish kills in 2001 and 2002,
Ameren went forward with several significant capital projects designed to improve thermal
performance
of its cooling system. The company spent in excess of $26 Million to construct a
70-acre cooling basin and a 48-cell cooling tower. These efforts substantially improved cooling
system performance. There have been no significant fish kills since the completion
of those
capital projects.
7.
Despite these improvements, however, compliance with the thermal limits in May
and October has been maintained,
in part, by scheduling planned outages or extending forced
outages
in those months. As noted above, declining lake levels coupled with higher than normal
summer temperatures exacerbated the compliance issues in 2007. In 2007, Ameren resorted to
de-rating its units in May and October, at substantial financial hardship, in order to maintain
compliance with the monthly average thermal limits.
8.
Ameren has analyzed other cooling alternatives to meet the current thermal
standard for May and October. Ameren retained Sargent
&
Lundy to do the engineering analysis
on behalf
of Ameren. Its report is attached to the Petition as Exhibit 15 thereto. That analysis
concluded that potential alternatives are either technically infeasible or otherwise unreasonably
cost prohibitive. Incurring substantial additional costs for the enhanced cooling technologies
investigated beyond those investments already made by the Company is not economically
reasonable
as none ofthese alternatives would provide a substantial additional environmental
benefit.
3
9.
In August 2007, Ameren performed an economic analysis of the costs associated
with the installation
of various enhanced cooling technologies. Ameren originally estimated that
the payback period for the installation
ofan $18 million, 175,000 gallon-per-minute ("GPM")
helper cooling tower would take approximately 11.5 years. Since the original analyses in the
Sargent
&
Lundy Report were performed in 2007, market prices for electric capacity and energy
have fallen considerably. Accordingly, Ameren prepared an updated analysis utilizing May 2009
capacity and energy prices. While conducting this economic analysis, Ameren also refined and
updated certain assumptions utilized in the August 2007 analysis regarding the capital
expenditures and revenue impacts associated with the installation
of enhanced cooling
technologies. The result was a conclusion that the 2007 analysis overstated the economic
viability
of an $18 million investment required to potentially increase the availability of the
Coffeen plant during two months
of the year. The updated economic analysis demonstrates that
the additional capacity revenues and energy margins realized from this increased availability
do
not recover the high up-front cost. The installation of such technology is therefore economically
unreasonable.
10.
Ameren then retained an outside consulting firm, ASA Analysis
&
Communications, to study the effect of modifying the thermal limits for May and October on the
lake and its aquatic communities. ASA's study concluded that modifYing the limits in May and
October as proposed by Ameren is expected to be environmentally acceptable.
11.
If adopted, these limits would more realistically reflect a natural thermal
environment, where temperatures fluctuate daily or weekly while increasing in the spring or
decreasing in the fall, rather than track the abrupt (16 to
18 degree) change inherent in the
existing thermal limits.
In recent years, the natural transition in ambient temperatures has
4
threatened exceedances of the non-summer thermal limits during unusually warm weather in
May and October. The proposed revisions to the May and October limits will avoid
circumstances that would cause reductions or suspension
of electricity generation simply to
adhere to artificially lower limits for the transition months. The lake therefore has been, and
would continue to be, environmentally acceptable.
12.
De-rating the units, especially in warmer weather, impacts electric consumers.
Coffeen is a lower-cost generator
of electricity. The unavailability or reduced availability of a
lower-cost generator like Coffeen will increase the daily and hourly market prices for power.
Further, on unseasonably warm days, demand for electricity will be higher, thereby exacerbating
the impact on prices and costs to consumers
of the reduced availability of a base load generator
like Coffeen.
In the longer term, higher wholesale prices for electricity in Illinois and the
Midwest will compel wholesale suppliers to bid higher prices to supply the needs
of electric
utilities such
as CIPS, Illinois Power and CornEd under contract, and thereby ultimately increase
the prices paid by retail consumers for electricity.
13.
Ameren has and continues to invest significant capital and resources in the control
of air emissions at Coffeen Station, including the installation of equipment to control mercury
emissions. The installation and operation
of flue gas desulfurization (
"FGD") and selective
catalytic reduction ("SCR") systems at Coffeen Station have the co-benefit
of reducing mercury
emissions in addition to sulfur dioxide and nitrogen oxide emissions, respectively. Ameren
expects to expend nearly
$600 million on two wet FGD projects at Coffeen Station, both
scheduled to go online at Coffeen Station by 2010. In addition, Ameren has expended
approximately $100 million on a retrofit
of SCR systems at Coffeen Station.
5
14.
Ameren takes its responsibility to the environmental very seriously. We have
instituted and maintain good management practices at the Coffeen Station. With regard
to
thermal discharges, good management through scheduled maintenance, de-rating, and the
implementation
of various cooling system enhancements has allowed Ameren to maintain
compliance with the thermal limits and ensure that Coffeen Lake is more than capable
of
supporting shellfish, fish and wildlife and a wide range of recreational uses.
IS.
I would like to conclude my testimony by taking a few minutes to talk about
Coffeen Lake State Fish and Wildlife Area, our long-standing partnership with the IDNR and the
company's commitment to the community. The cooling pond known
as Coffeen Lake was open
to the public in 1986 under a long term lease with the IDNR. The lake offers over 50 miles
of
shoreline with a lake depth averaging 19 feet and a maximum depth of close to 60 feet. The
State Park offers the public great fishing, boating, hunting, camping and wildlife viewing
opportunities thanks, in large part, to the good work
of IDNR.
16.
The lake is a well-known championship fishery. Thus far this year, for example,
Coffeen Lake has hosted over 30 scheduled fishing tournaments through May.
17.
I am taking the time to mention this to you because I am very proud of our power
plant and especially proud
of our lake. We believe Coffeen Station and the lake are a very
important part
of the community and the State. Most importantly, though, we feel strongly about
our partnership and work with the IDNR to continue to make Coffeen Lake one
of the best
recreational fishing lakes
in the State of Illinois.
18.
Ameren has invested tens of millions of dollars worth of operational and hardware
improvements to address temperatures associated with our discharge. As a side note, but just as
important, in later this year we will begin work to install new state-of-the-art scrubbers on our
6
Electronic Filing - Received, Clerk's Office, May 12, 2009
units to control air emissions, including mercury. These new scrubbers are two of the few in the
State that will be capable
of burning Illinois Coal-something we hope to be doing by mid-year,
next year.
19.
Again, my point in highlighting all of this is to emphasis our continuing work at
Coffeen Station and to emphasis that offering Coffeen Lake to the public for its enjoyment is just
as important to the company as the operational need for which the Lake was originally built.
20.
As one fisherman noted, Coffeen Lake is a "Hidden Jewel"- his words not mine
but I certainly agree. Ameren and Coffeen Station will continue in partnership with IDNR
so that
sportsmen and all the public who have visited our lake and ha
ve boasted about our "Hidden
Jewel", will continue to boast about our lake in the future.
I thank you for the opportunity to present this testimony to the Board.
7
Electronic Filing - Received, Clerk's Office, May 12, 2009
Attachment
1
8
Electronic Filing - Received, Clerk's Office, May 12, 2009
enTne
105° Monthly A vg
112° Max - 3% Hrs
.A
r
"-
Jan
Feb
Mar
April
May
June July
Aug
Sept
Oct
Nov
Dec
\.
~
\
~
89° Monthly A vg
94° Max - 2% Hrs
Electronic Filing - Received, Clerk's Office, May 12, 2009
Attachment 2
9
~"
-
*'eren
105° Monthly A vg
112°
Max - 3% Hrs
.A
r
'\
Jan
Feb
Mar
April
May
June July
Aug
Sept
Oct
Nov
Dec
\.
.."
J
l
1
.J
,.
..
96° Monthly A vg
102°
Max - 2% Hrs
89° Monthly A vg
94°
Max - 2% Hrs
Electronic Filing - Received, Clerk's Office, May 12, 2009
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