Lower wholesale prices shut OMU's Unit 1 early

Photo by Greg Eans, Messenger-Inquirer.com/geans@messenger-inquirer.com Owensboro Municipal Utilities' Elmer Smith Station.

The oldest and smallest of two Elmer Smith Station power production units in Owensboro shut down for good last month.

According to Owensboro Municipal Utilities' officials, recent market conditions in the eastern United States lowered the wholesale price of coal-fired electricity. So, nearly a month before the unit was scheduled to close anyway and a year before the plant will be shuttered for good, that meant it was no longer economically feasible to continue running the 55-year-old, 164-megawatt boiler.

"Temperatures last month were fairly mild across portions of the country, which meant that the prices weren't there to support running Unit 1 any longer," said OMU General Manager Kevin Frizzell. "Unit 2 was on a short maintenance outage at the time, but, when it came back online, we decided to take Unit 1 off for good."

A purchase power agreement the City Utility Commission signed with Big Rivers Electric Corp. in Henderson is not yet in effect, however, because the much larger, 282-megawatt Unit 2 can produce more than enough to supply Owensboro and Daviess County's estimated 180-megawatt summertime peak demand before its scheduled shutdown next year.

Should Unit 2 experience any type of "catastrophic failure," Frizzell said, Unit 1 has been left on standby to begin generating electricity once more before the Big Rivers contract is triggered into place.

By the end of the summer, however, power production employees will begin draining oil and lubricants, cleaning pump reservoirs and removing water from the boiler in order to prepare it for a long-term shutdown scenario. Between then and when Unit 2 is scheduled to shut down next year, OMU will rely on purchased power to fill in any gaps in service.

"We're not going to do anything to the unit that would make a restart completely irreversible," Frizzell said. "Even after the summer peak load, it will be available, but we would have to expend some funds to get it up and running."

OMU considers it unlikely, he said, that Unit 1 is needed again, he added.

The municipal utility has been sharing load curve and profile data with Big Rivers ahead of next year's switchover, and the interconnection process has been started that will allow for power transfer to OMU-controlled lines.

The 2018 purchase power agreement came after years of stagnant wholesale prices driven, in part, by cheap and competitive American natural gas reserves. Coupled with the age of Elmer Smith Station, OMU began consulting with firms that recommended shutting down both units as recently as 2016, but the utility commission held off on any final decision until another provider could be contracted.

Last month's Unit 1 shutdown had no material effect on staffing at Elmer Smith Station because the utility has already reduced staff through attrition to support just one production unit.

Austin Ramsey, 270-691-7302, aramsey@messenger-inquirer.com, Twitter: @austinrramsey

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