Bonnie Arbittier / Rivard Report
On New Year’s Eve, CPS Energy officials offered a window into the final hours of a coal plant that converts the energy from creatures that died millions of years ago into electricity that heats homes, charges phones, and keeps the lights on.
Following years of pressure from environmentalists and a commitment in 2011 by then-President and CEO Doyle Beneby, CPS Energy will close its J.T. Deely coal-fired plant to commercial operations by the end of Monday. The plant has generated power for San Antonio since the first of its two units went in service in 1977, amid the natural gas shortages of the 1970s. The second went online in 1978.
“Interestingly, those units performed extremely well over the 2018 time period,” CPS Energy President and CEO Paula Gold-Williams said. “But the fact of the matter is those units are over four decades old … and aging, and we’re thinking about how to get the optimization out of our new investments going forward. ... Where do we go from here?”
By late Monday morning, when utility officials led members of the media to Deely’s turbine deck, the Deely 2 unit had already been shut down. Its twin, Deely 1, was set to stop operating Monday night.
No more will coal rumble into Deely on conveyor belts that carry the fuel from a massive pile on the edge of Calaveras Power Station, which hosts Deely and several other CPS Energy fossil fuel plants. Train cars dump their loads into the pile after ferrying the coal south from the Powder River Basin in Wyoming.
No longer will crushers in the bowels of Deely pulverize the coal into a consistency “like face powder,” as Senior Vice President of Power Generation Benny Etheridge put it. The boilers that burn the powdered coal to create steam will go cold and quiet.
With no steam to turn them, the twin turbines will sit in stillness. They won’t turn the two generators that produce electricity for the municipally owned utility’s more than 800,000 customers or for the far-flung Texans who get power from CPS Energy via the state grid.
Deely’s shutdown also means that millions of tons of greenhouse gases, ozone-forming nitrogen oxides, and haze-inducing sulfur dioxides will not make their way into the atmosphere.
Alan Montemayor, member of the Alamo Group of the Sierra Club, whose members have long urged CPS Energy to shift away from fossil fuels, cited issues ranging from Deely’s air pollution to the vast amounts of water needed to produce steam as reasons to toast Deely's demise.
“We’re exultant that this is the first [coal] plant that CPS Energy is closing down,” he said. “It’s a big deal.”
In 2017, the Deely units emitted more than 4.2 million metric tons of carbon dioxide equivalent, according to U.S. Environmental Protection Agency data. Carbon dioxide is the most significant heat-trapping gas emitted by fossil fuels combustion.
For comparison, that’s a little less than the 4.8 million metric tons of carbon dioxide equivalent that all the private cars and trucks on San Antonio roads produced in 2016, according to a recent greenhouse gas inventory for the city.
The plant is also a significant source of nitrogen oxides, which combines with other pollutants to form ozone. Ozone irritates and damages the lungs and is linked with health problems like asthma and other chronic lung conditions.
State data from 2016, the latest available, show that the Calaveras Power Station produced more than 4,400 tons of nitrogen oxides that year. However, those figures also include pollution from the J.K. Spruce coal plant and the O.M. Sommers natural gas plant, both of which are also part of Calaveras.
In July, the U.S. Environmental Protection Agency declared that San Antonio’s ozone levels are too high to comply with a federal health standard. Shutting down Deely is expected to help push San Antonio’s ozone levels back below the limit by 2020, according to air modeling by the Alamo Area Council of Governments.
However, closure of the plant derided by environmentalists as "Dirty Deely" also marks a new era for CPS Energy, in which the extra gap between power generation capacity and peak demand is lower than in recent years, according to figures utility officials shared at a Dec. 28 board meeting.
Over the past seven years, utility officials have prepared for Deely’s closure by expanding efficiency programs and adding eight solar farms totaling 450 megawatts of capacity.
In 2012, CPS Energy purchased the 800-megawatt Rio Nogales natural gas plant for under $400 million. That’s less than the roughly $600 million that would have been required to install sulfur dioxide pollution controls under Obama-era environmental policies that the Trump administration has since focused on rolling back.
“The economics said move to gas,” Ethridge said on the tour of the plant. “It’s a math problem, is all it is.”
The utility's current plans call for continued use of coal over the next few decades. The utility is spending more than $28 million replacing a faulty generator at its J.K. Spruce 2 coal unit, which it plans to run through 2042. That unit includes controls that limit emissions of ozone-forming nitrogen oxides, unlike the older Spruce 1, which it plans to close in 2030.
Despite the continued use of coal, natural gas, and nuclear power, Deely's closure will take CPS Energy’s reserve margin – the utility’s excess generation capacity above the maximum of what its customers demand – from 33 percent this year to 14 percent next year, Ethridge said.
Ethridge described a 14-percent reserve as “a lot of generation” and said it puts the utility in “very good shape” through 2024, at which point officials expect the reserve margin to rise to 15 percent.
But Gold-Williams said that in the future, CPS Energy and the community as a whole will have to decide what to do as the city grows. If that margin shrinks below zero, it would expose CPS Energy customers to spikes in the price of electricity on the grid, Gold-Williams said.
“We will have to talk about the future,” she said. “Buying and investing in capacity is something that this community has always done. … If we ever let that reserve margin go negative to where we are exposed to the market, it would be very challenging, and we don’t necessary recommend that, so we’re going to continue to look at our options in the future.”
One of those options could be reviving Deely as a natural gas plant. CPS Energy officials have long hinted at that possibility, and the plans for Deely call it to be not demolished but “mothballed,” which would allow some key generation equipment to be put to new use.
“There is tremendous value in that location,” Ethridge said at the meeting. “We’ve got transmission interconnect, we’ve got cooling water, we’ve got natural gas, we’ve got great infrastructure. And we’re close to many of our other locations. As we think about our future generation needs, it’s a great location. We recognize it.”