Cleco Power LLC

Cleco Power LLC is investing $1 billion in a new 660-megawatt generator that can burn a variety of solid fuels. Keith Regan learns how that fuel flexibility could enable the Louisiana utilityÔÇÖs customers to save billions over the life of the project Seventy percent of the generating capacity at Cleco Power LLC comes from natural-gas-fired generators. As a result, customers of the regulated electric utility, which is based in Pineville, Louisiana, and serves some 270,000 customers in that state, were exposed to the spikes in the price of natural gas. Cleco is doing something major to address that situation, investing $1 billion to build Rodemacher 3, a major solid fuel generation plant being constructed on Lake Rodemacher. The new facility, which is scheduled to begin generating power as soon as mid-2009, will utilize circulating fluidized-bed (CFB) technology in its boilers, which will enable Cleco to burn a variety of fuels, including petroleum cokeÔÇöa refinery byproductÔÇöand several types of readily available coal. The CFB boiler is being provided by Foster Wheeler. Bill Fontenot, vice president of regulated generation development for Cleco, says the utility became interested in CFB after Foster Wheeler installed it at a facility owned by the Jacksonville Energy Authority in Florida. The JEA facility was the first to bring CFB technology to the commercial power generation level. ClecoÔÇÖs facility will become the ÔÇ£bigger brother to that sister project,ÔÇØ Fontenot says. Rodemacher 3 will feature twin 330-megawatt boilers compared to the twin 300-MW boilers at JEAÔÇÖs plant. ÔÇ£At the time we began exploring it, CFB was considered a very cutting-edge and clean-burning coal technology, so there were environmental considerations from the beginning,ÔÇØ Fontenot says. ÔÇ£But the real driver was the flexibility it gives us in terms of fuel choices.ÔÇØOnce the plant is operational, Cleco will have close to a 50-50 balance of fuels for its generating fleet, with half coming from natural gas and the other half of its output capable of being generated by other fuel sources. ÔÇ£ThatÔÇÖs a level of balance that we feel much more comfortable with and we think offers our customers better protection against wild price swings,ÔÇØ he adds. The CFB facility will enable a variety of coal products from a variety of sources to be used, with Cleco able to source coals from Appalachia to the Powder River Basin or to use byproducts such as petroleum coke. ÔÇ£Typically a generator might be set up to burn coal with a certain sulfur content, but with this technology we can burn petroleum coke, a variety of coal products and even certain renewable energy sources, such as biomass,ÔÇØ Fontenot explains. ÔÇ£That in turns means we can always ensure that weÔÇÖre consuming the lowest-cost fuels.ÔÇØThe burners in the generator will enable almost seamless transition between power sources, with virtually no disruption in plant operation and while maintaining emissions that meet or exceed current Environmental Protection Agency and state standards. Because hard fuels come with a considerable transportation cost and lead time, however, the flexibility will be limited by such constraints. ÔÇ£ItÔÇÖs not like a gas transaction, where you have a meter on a pipe and can just turn it on or off. The logistics challenges are considerable, so you may still have to look out six months or so, but you can still get a lot of benefit from that flexibility.ÔÇØ The facilityÔÇÖs location on the Red River means it can easily accept shipments from many locations via coal barge. The new plant is also the largest permanent jobs creation project in 20 years for the utility, with close to 80 new positions being created. The present operating staff have years of experience in burning solid fuels at one of the other two facilities at RodemacherÔÇöthe 440-MW Rodemacher 1 burns natural gas and oil, while Rodemacher 2, which can generate 523 MW, burns coalÔÇöare being trained in the CFB technology. A simulator facility has been built onsite that gives hands-on experience to plant operators, who have also had the opportunity to train inside the JEA facility as well as with vendors of the equipment being installed in the new plant. ÔÇ£WeÔÇÖre fortunate to have a very strong team of plant technicians, engineers and operators who understand how to work with solid fuels, and they are being trained specifically to operate this plant as we get closer to going live,ÔÇØ Fontenot says. After several years of permitting and regulatory reviews, construction began in 2006, with Shaw Constructors Inc., a unit of the Shaw Group, being given a fixed-price contract to handle engineering, design, procurement of major equipment as well as construction and the coordination of subcontractors. FontenotÔÇÖs department, meanwhile, has served in an auditing and review role throughout the project. Shaw also managed to find ways to keep the schedule on track through early deliveries of some components of the plant. In fact, two years into construction, the target completion date was moved up several months. ÔÇ£Having parts delivered early enabled Shaw to do some pre-assembly onsite and have components ready to be put into place as the construction cycle progressed.ÔÇØ The utility argues that the long-range benefits of the sizable investment are significant, meanwhile. The sheer stability of hard-fuel sources versus the volatility of natural gas provides a benefit in terms of giving the utility confidence on pricing. Over the life of the plant, rate payers are expected to save some $4 billion. ÔÇ£Where we are just up from the mouth of the Mississippi, petroleum coke is readily available, and right now that gives us the best price in terms of cost per BTU, and thatÔÇÖs what weÔÇÖre focused on,ÔÇØ Fontenot adds. ÔÇô Editorial research by Tim Conlon┬á