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Central Electric Power Cooperative to Cease Operation of Chamois Power Plant

JEFFERSON CITY, Mo. – After reviewing the economics of continued operation of Chamois Power Plant, the board of directors of Central Electric Power Cooperative, headquartered in Jefferson City, has reached a decision to cease operations at the plant Sept. 30, 2013.  The Chamois Power Plant is located in Chamois, Mo., in Osage County.  The Central Electric board reached this decision after considering the impact of increasing costs from upcoming environmental regulations, higher fuel delivery costs and needed on-site improvements for coal shipment, slower member load growth and lower natural gas prices.

Through a contractual arrangement between Central Electric and Springfield, Mo.-based Associated Electric Cooperative (AECI), expenses for the plant have been paid by AECI since 1962 in exchange for full use of the plant. AECI also is Central Electric’s wholesale power supplier.

Chamois Unit 1 was built in 1953, and a second unit was added in 1960. It is the oldest and smallest of AECI’s coal-fired generation resources. In recent years, the Chamois plant has provided a small percentage of the electricity AECI needed to supply 875,000 consumer-members in Missouri, Oklahoma and Iowa, including all of those in Central Electric’s service area.

The 66-megawatt coal plant currently employs 28 people.  AECI will assist employees in seeking positions at its power plants.  Those not finding a position will be offered a severance package that varies with service.  The package will provide a minimum of 8 weeks of wages.

A major factor that affects the economic viability of the Chamois plant is the environmental regulations requiring further controls. Meeting 2015 requirements for controlling mercury and small ash particles would require an estimated $4.1 million in capital expenditures and about $150,000 every year to operate the controls. A conversion to low-sulfur coal would be required for unit 1 in 2017, at a cost of $1.9 million. Controlling sulfur dioxide emissions would require another $8 million by 2019. These expenses make continued operation of the plant uneconomical.

Second, the plant’s long-term contract for coal delivery will expire after 2013, and the new contract price is significantly more expensive. Also, a new $3 million rail siding is needed to unload coal cars.

Growth rate in member electric loads, which has slowed during the last few years, is the third factor. AECI has other power plants that can supply members more economically, including a 1,200-MW, coal-fired plant at New Madrid, Mo., and a second 1,153-MW, coal-fired plant at Thomas Hill Energy Center near Moberly, Mo. AECI also supplies power from natural gas, wind and hydroelectric sources.

Finally, the natural gas market has changed significantly in the last several years.  AECI  has more than 2,700 megawatts of high-efficiency natural gas capacity.  With lower gas prices and more generators available to operate with natural gas, AECI has more flexibility to achieve the lowest cost for members.

Central Electric, AECI and their member systems are tied together in a unique, three-tiered system of generation, transmission and distribution cooperatives. The top tier of the three-tiered system is made up of 51 local distribution cooperatives that provide electric service directly to member-consumers, including businesses, farms and households.

At the second level of the system, Central Electric and five other regional transmission cooperatives, transmit power from AECI’s power plants to the distribution cooperatives.

Central Electric and the other 5 regional G&Ts formed AECI, the system’s third tier, in the early 1960s to provide generation, power procurement and high-voltage transmission.

 

For a PDF of this news release, click HERE.

 

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