HomeMy WebLinkAbout2004-07-09 NAC Planning ReportRE:
NORTHWEST ASSOCIATED CONSULTANTS, INC.
5775 Wayzata outevard, Sufsr4 555, St, Louis Park, MN 65416
Telephone: 952.5.9.6.9636 Facsimile: 952.595.9837 p/annem4nacplarmingcorn
PLANNING REPORT
TO: Eric Johnson
FROM: Scott Richards
DATE: July 9, 2004
FILE NO: 798.02 — 04.08
BACKGROUND
Oak Park Heights — Xcel Energy /A.S. King plant: Metro Emissions
Reduction Project (MERP) to install state of the art pollution
control equipment and cooling tower replacement
Ronald Elsner, representing Xcel Energy, has made application for a conditional use
permit for improvements in the River Impact District, a conditional use permit for land
reclamation and grading, and variances from height requirements for the Allen S. King
Generation Plant. The applications are to accommodate a 382 million dollar plant
upgrade that would install state of the art pollution control equipment at the King plant
and replace existing cooling tower structures. The plant is located on Highway 95,
adjacent to the St. Croix River.
The MERP project started in 2004, with completion expected in 2007. The peak of
construction wilt be in 2006 and early 2007. At the time of peak construction, up to 300
construction workers could be involved in the project.
The property is zoned 1, Industrial District in which power generating plants are a
permitted use. The King plant is also in a River Impact District which requires a
conditional use permit for construction activities. A conditional use permit is also
required for the fill that will be added to install flood control devices. The variance is
required for building height.
Attached for reference:
Exhibit 1:
Exhibit 2:
Overall Site Plan
Power Plant Equipment Layout Diagram
Exhibit 3:
Exhibit 4:
Exhibit 5:
Exhibit 6:
Exhibit 7:
Exhibit 8:
Exhibit 9:
Exhibit 10:
Exhibit 11:
Exhibit 12:
Exhibit 13:
ISSUES ANALYSIS
Cooling Tower Site Plan
Conceptual Elevation of New Cooling Tower
Roadway Construction Site Plan
Construction Parking Plan
Power Plant Perspective (After Construction)
Project Timeline
Tree Inventory and Maps
Application Description from Xcel
Letter and Scope of Project from Xcel
Letter on Tax Implications
Letter from Eric Johnson on Tax Implications
Comprehensive Plan. The Comprehensive Plan designates the area as industrial
land use. The power plant and its accessory structures are recognized as industrial
land uses consistent with the maps and policies of the plan.
Zoning Ordinance. The site is zoned 1, Industrial District in which power plants and
accessory structures are a permitted use. The King plant is also located in the River
Impact District. Section 401.34 of the Zoning Ordinance requires a conditional use
permit for significant development /redevelopment within the River Impact District. A
conditional use permit is also required for land reclamation and grading under Section
308.08 of the City Code. That provision of the Code indicates that movement of more
than 25 cubic yards of material per acre requires submittal of plans and a conditional
use permit review. The height variance is required to vary from the 45 foot height
requirement specified under Section 401.15.C.2 of the zoning Ordinance.
The setbacks proposed for the plant upgrades are consistent with the Zoning Ordinance
setbacks specified in Section 401.15.C.1. The project is also subject to the Shoreland
Regulations which specify a 100 foot setback from the ordinary high water level and a
30 foot setback from the top of a bluff. The addition to the cooling towers will be the
structural elements closest to the ordinary high water level and the top of bluff. The new
cooling tower will be in approximately the same location as the existing structure and is
setback at least 40 feet from the top of the bluff and 140 feet from the ordinary high
water level.
Proposed Project. The MERP project involves rehabilitation of the King plant to
reduce emissions and modification of selected plant equipment to extend the life of the
plant at approximately original capacity.
The scope of the project is to add emission control equipment and rehabilitate existing
electric generation equipment to return the King plant to its original design capacity.
The new air quality control system includes selective catalytic reduction for nitrogen
oxide (NOx) control, flue gas scrubbers for control of sulfur dioxide (S02) emissions, and
2
Emission
Reduction
Sulfur Dioxide, S02
91%
Nitrous Oxide, NO
89%
Particulate Matter
20%
Mercury
20%
fabric filters for control of particulate matter. With these modifications, the King plant will
reduce current annual air emissions by the following amounts:
The rehabilitation also includes steam turbine replacement, steam generator repairs and
modifications, circulating water system modifications, coal handling upgrades, auxiliary
electric system upgrades, and other equipment rehabilitation to extend the life of the
plant, making the emission control upgrades cost effective.
The scope of the work and timeline is found as Exhibit 9. The project is expected to be
completed in June of 2007. At the peak of construction, there will be approximately 300
employees, contractors, and trade personnel working at the King plant.
Parking /Traffic. The plant currently has adequate parking for the current operations
and the Administration Trailer Complex that will be installed this Summer. The
submitted plans indicate 316 temporary parking stalls that will be installed to
accommodate the construction workforce. xcel will need to work with Andersen
Corporation, MnDOT and the City as the project progresses to analyze any traffic
concerns on Highway 95 that could occur from workforce shift changes at this
construction site and at Andersen.
Lighting. Any lighting of the construction site and of the temporary parking lots will
need to be in compliance with the Zoning Ordinance and subject to review and approval
of City staff.
Tree Protection /Replacement and Landscaping. The submittals include a tree
inventory and maps indicating the trees to be removed. The tree removal and
replacement aspect of this project subject to review and approval of the City Arborist.
No additional landscaping is proposed for this project. The existing trees adjacent to
the St. Croix River will remain to provide partial screening of the cooling towers to the
river.
Tax Implications. The applicants have provided information related to the tax
implication for the MERP project. That information is found as Exhibit 12. Eric
Johnson, City Administrator, has addressed the tax issues in his letter found as Exhibit
13.
Design Guidelines. The Design Guidelines specify that all structures requiring a
building permit require design review. The power plant and the existing accessory
structures were not built subject to the Design Guidelines standards. The power plant
3
and cooling towers are industrial structures constructed of specific materials appropriate
to the function of the plant.
Variations to the Design Guidelines may be allowed by the City Council. Due to the
unique construction required for the cooling towers and the power plant upgrades, the
Design Guidelines should not be enforced for the proposed structures.
Conditional Use Permit — River Impact District. The overall MERP improvements
for the King plant are subject to conditional use permit approval. The Planning
Commission should consider the conformity, environmental issues and impacts of the
proposed project in making its recommendation. The conditional use permit criteria,
found in section 401.03.A.7 of the Zoning Ordinance, are found as follows:
1. Relationship to the specific policies and provisions of the municipal Comprehensive
Plan.
2. The conformity with present and future land uses in the area.
3. The environmental issues and geographic area involved.
4. whether the use will tend to or actually depreciate the area in which it is proposed.
5. The impact on character of the surrounding area.
6. The demonstrated need for such use.
7. Traffic generation by the use in relation to capabilities of streets serving the property.
8. The impact upon existing public services and facilities including parks, schools, streets,
and utilities, and the City's service capacity.
9. The proposed use's conformity with all performance standards contained herein (i.e.,
parking, loading, noise, etc.).
Due to the location of the King plant in an industrial area, the importance of the facility to
the area and the Metro region as a whole, and the goal of the current project to improve
the emissions from the facility, the project is consistent with the above criteria.
Conditional Use Permit Land Reclamation. As part of the project, significant new
berms are being added on site to provide flood control for the plant and accessory
structures. The conditional use permit is required as a means of review for this degree
of fill and change to the existing grade. The addition of the berms will protect the plant
and xcel's significant investment in the site. The same criteria for conditional use
permit approval should be reviewed for this request.
The grading and drainage plans shall be subject to review and approval of the Corps of
Engineers, Department of Natural Resources, and the City Engineer.
Variance — Building Height. As indicated, the building height requirement is 45 feet
within the 1, Industrial District. The existing power plant, stack and cooling towers
exceed this limit. The City granted a variance in 2000 to allow for the construction of
the cooling towers that will remain on site. Exhibit 1 indicates the proposed heights of
the various elements of the rehabilitation project. The tallest element of the
rehabilitation project for the plant would be 199 feet. The cooling tower would be 68
feet.
4
Section 401.04.A.4 of the Zoning Ordinance states that a variance from the terms of this
Ordinance shall not be granted unless it can be demonstrated that:
a. Undue hardship will result if the variance is denied due to the existence of special
conditions and circumstances which are peculiar to the land, structure, or
building involved and which are not applicable to other lands, structures or
buildings in the same district.
1) Special conditions may include exceptional topographic or water
conditions or, in the case of an existing lot or parcel of record,
narrowness, shallowness, insufficient area or shape of the property.
2) Undue hardship caused by the special conditions and circumstances may
not be solely economic in nature, if a reasonable use of the property
exists under the terms of this Title.
3) Special conditions and circumstances causing undue hardship shall not
be a result of lot size or building location when the lot qualifies as a
buildable parcel.
b. Literal interpretation of the provisions of this Ordinance would deprive the
applicant of rights commonly enjoyed by other properties in the same district
under the terms of this Ordinance or deny the applicant the ability to put the
property in question to a reasonable use.
c. The special conditions and circumstances causing the undue hardship do not
result from the actions of the applicant.
d Granting the variance requested will not confer on the applicant any special
privilege that is denied by this Ordinance to other lands, structures or buildings in
the same district under the same conditions.
e. The request is not a result of nonconforming lands, structures or buildings in the
same district.
f. The request is not a use variance.
9.
The variance requested is the minimum variance necessary to accomplish the
intended purpose of the applicant.
h. The request does not create an inconvenience to neighboring properties and
uses.
The hardship in this case would be the necessity to design the structures to this height
for the proper functioning of the power plant. A power plant is a specialized industrial
facility that requires the heights proposed. The plant cannot be constructed at the 45
foot height limitation. The design of the power plant and the cooling tower mandates
the height of the proposed improvements, which is determined as a special condition
that necessitates the approval of the variance.
5
Federal and State Approvals. The plans for the project must be submitted to the
applicable Federal and State agencies for approval including, but not limited to, the
Corps of Engineers, Minnesota Pollution Control Agency, Department of Natural
Resources, and others that apply.
CONCLUSION AND RECOMMENDATION
Based upon the preceding review, City staff recommends approval of the conditional
use permits and variance for the MERP project at the King plant. Further, staff
recommends that the Design Guidelines be waived for the structures proposed on the
site. The approvals are subject to the following:
1. Xcel shall work with the Andersen Corporation, MnDOT, and the City as the work
progresses to analyze any traffic concerns for Highway 95.
2. Xcel shall construct at least 300 parking stalls to accommodate construction
personnel for the project.
3. All lighting at the construction site and temporary parking lots shall be in
compliance with the Zoning Ordinance.
4. The tree removal and replacement shall be subject to review and approval of the
City Arborist. No additional landscaping is required for the project.
5. The City will not require conformance with the Design Guidelines for the project.
6. The plans for the project must be submitted to and are subject to approval of the
Corps of Engineers, Minnesota Pollution Control Agency, Department of Natural
Resources, and others that may apply.
7. Xcel anticipates that the boiler and turbine will not be considered exempt for tax
purposes under MN Statutes 272.02 or as amended.
8. Any other conditions of the City staff, Planning Commission and City Council.
6
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„ Start - Fall 2006
R eturn to Service
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ien't Activity - Summary
MERP Sheet 1 of 1
Xcel Energy
AS King Rehabilitation Project
Layout by Project Area - Summary
tO 10 PO TM
tooE
A mmen a mi. Jir Permit A lication
Water Permit Applici
MERP Engineer
MERP Procure
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Description
ones 1 Outages
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Outage Start - Fall 2006
Return to Service
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Construction Activities
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ZITC005 Steam Turbine Replacement
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Construction Activities
Z1SC005 SCR - Construction
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Construction Activities
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-Construction
ctivities
MERP Engineering Activity - Summary
ElZE010 MERP Procurement Activity - Summary
JIM
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XLMUTFLO6S
- , -- -,
King Plant Tree Inventory
Tree No. Tree Type /Species
1 Poplar/aspen
2
Poplar/aspen
3 Poplar/aspen
4 Conifer
5 Conifer
6 Conifer
7 Elm
S Poplar
Poplar
10 Poplar
11 Poplar
12 Poplar
13 Poplar
14 Poplar
15 Elm
16 Elm
17 Elm
18 Elm
19 Weeping Willow
20 Weeping Willow
21 Weeping Willow
Location
NW parking/laydown area
NW parking/laydown area
NW parking/laydown area
NW parking/laydown area
NW parking/laydown area
Between warehouse and new road
Between warehouse and new road
Between warehouse and new road
Between warehouse and new road
Between warehouse and new road
Between warehouse and new road
Between warehouse and new road
Next to warehouse
Next to warehouse
Next to warehouse
Next to warehouse
Between warehouse and new road
Between warehouse and new road
New haul road entrance from King
Plant Rd.
DBH (in)
12
12
21
2
2
4
4
13
17
18
13
14
12
17
12
12
14
17
36
28
45
Height (ft)
N/A
N/A
N/A
10+
10+
10+
NW parking/laydown area
NW parking/laydown area
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
EXHIBIT 9
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Emission
Reduction
Sulfur Dioxide, Sot
91%
Nitrous Oxide, NOx
89%
Particulate Matter
20%
Mercury
20%
Xcel Energy June 8, 2004
King Rehabilitation
Introduction
The xcel Energy Metro Emissions Reduction Project (MERP) will install state -of- the -art
pollution control equipment at the Alien S. King (hereafter, "King ") plant in Oak Park
Heights to significantly reduce air emissions from this facility.
MERP reflects our commitment to providing reliable energy to customers while reducing
the environmental impact of generating that power. The package of additions and
improvements at King, valued at $382 million, will be completed over the next three
years.
The scope of the project is to add emission control equipment and rehabilitate existing
electric generation equipment to return the King plant to its original design capacity. The
new air quality control system includes selective catalytic reduction for nitrogen oxide
(NO control, flue gas scrubbers for control of sulfur dioxide (S0 ) emissions, and
fabric filters for control of particulate matter. With these modifications, the King Plant
will reduce current annual air emissions by the following amounts:
The rehabilitation also includes steam turbine replacement, steam generator repairs and
modifications, circulating water system modifications, coal handling upgrades, auxiliary
electric system upgrades, and other equipment rehabilitation to extend the life of the
plant, making the emission control upgrades cost - effective. Additional information on
the scope of the project is included in Attachment 1.
1
EXHIBIT 10
Xcel Energy
King Rehabilitation
project Details
Scope of Work
Schedule
Construction Personnel
June 8, 2004
The scope of work for the King Plant includes the introduction of emissions reduction
equipment as well as replacement and modification of existing equipment to extend the
life of the plant at approximately its original capacity. See Attachment 1 for scope
details.
The strategic planning for the King Plant portion of the MERP began in October, 2003
and the entire scope of work will be completed in June of 2007. Please see Attachment 2
for a schedule of the project milestones, including engineering and construction.
At the peak of construction activities, there will be approximately 300 employees,
contractors and trade personnel working at the King Plant. Some of these will be directly
contracted by Xcel, others will be subcontracted through construction contractors and .
vendors whose scope includes erection of new equipment.
Parking
We estimate that we will need and provide approximately 300 temporary parking spaces
to accommodate the peak workforce for this project. Please see Attachment 3 for the
conceptual parking arrangement.
Lighting Plan
Lighting added for this project will be in accordance with city standards and
requirements.
Tree Protection and Replacement
It is our intention to minimize the project's impact to the tree population on the King site.
But, while we don't anticipate having to remove "significant" trees — as defined by the
City of Oak Park Heights' "Landscape Guidelines for Developers" (3/1/2002) — some
impact may be inevitable. We will work with you at a future date to mitigate any impact.
2
December 11, 2003
Dear Dr. Haar,
rgy
Burl W. Haar
Executive Secretary
Minnesota Public Utilities Commission
121 Seventh Place East, Suite 350
St. Paul, .MN 55101 -2147
RE: SETTLEMENT AGREEMENT
EMISSIONS REDUCTION PROPOSAL
DOCKET No. E002/M -02 -633
414 Nicollet Mall
Minneapolis, Minnesota 55401-1993
On behalf of Northern States Power Company d /b /a Xcel Energy, the
Minnesota Department of Commerce, the Office of the Attorney General
Residential Utilities Division, the Minnesota Pollution Control Agency,
Minnesota Chamber of Commerce, Northstar Steel, Izaak Walton League of
America — Midwest Office, Minnesotans for an Energy-Efficient Economy,
Suburban Rate Authority and the Sierra Club (collectively, "Parties "), please
find the attached Settlement Agreement proposed for the Commission's
consideration and approval in this docket. The Parties recommend that the
.Iinnesota Public Utilities Commission approve the Proposed Plan filed by
Xcel Energy on July 26, 2002 in this proceeding, subject to the terms of this
Settlement Agreement. The Parties agree that the Plan achieves significant
environmental benefits that are not otherwise required by law at a cost that is
significant but not unreasonable, consistent with the requirements of .Minn.
Stat. 216B.1692.
Specifically, the Commission can find that the Plan and the rate rider, subject to
the terms of the attached Agreement, meet the requirements of Mini.. Stat.
216B.1692, subd. 5. Under this provision, the Commission may approve a rate
rider that:
( the utility to recover the costs of gualz:j]ing emissions redaction projects net of
revenues attributable to the project. Provision. 23 of this Agreement provides a
mechanism and requirements for crediting revenues to the rate rider in
compliance with this requirement.
EXHIBIT 11
(2) Allozvr an appropriate return on investment associated with qualz:fting emissions at
the level established in the pzrblic utility s last general rate case. Provisions 8 - 12
address rate of return, providing, among other things, asliding -scale
approach to encourage effective management of Plan implementation.
This incentive return is an important provision for ensuring the overall
reasonableness of the costs of Plan.
(3) Allocates pr ject costs appropriately between wholesale and retail customers.
Provision 16 provides for appropriate jurisdictional allocations.
(4) Provides a mechanism for recover above cost, ifnecessay to improve the overall
economics of the gaaalifilingprojectr to ensure implementation. Provision 9
addressing Construction Work in Progress provides for recovery of the
return on CWIP during the construction period of the Plan. This
treatment provides for recovery of costs in a way different than
traditional ratemaking. Given the magnitude of the Plan and the length
of the construction period, this treatment of CWIP is needed to ensure
implementation of the Plan.
(5) Recovers costa from retail customer classes in proportion to class energy consainaptiosa.
Provisions 31 and 32 address rate design and satisfy this requirement.
(6) Terminates decoveg once the costs of the gataliffizagpr jectr have beenfiilly recovered.
Provision 28 provides the elimination of the rate rider in the first rate
case after all three plants have come into service.
The statute further provides conditions under which the Commission may not
approve a rate rider, including whether the project is required by law or as a
part of any corrective action. Such conditions do not apply to the Plan, as
evidenced by the December 29, 2002 Report of the Minnesota Pollution
Control Agency. Finally, the statute provides that Commission may not
include in the rider any costs that are not directly allocable to the reductions of
emissions. This requirement likewise does not apply to the Plan. The
Minnesota Legislature removed any ambiguity on this point with its passage of
2003 Laws of Minnesota, First Special Session, Chapter 11, Article 3, Sec. 12 at
1687-88, which states that all costs related to the Company's primary proposal
in this proceeding are eligible for recove ry through the rate rider.
This Agreement provides rate terms that protect ratepayers while facilitating
implementation of the Plan. Subject to these terms, the Plan and rate rider
meet the statutory requirement of achieving significant environmental benefits
with consumer costs that, while significant, are not unreasonable. The Parties
thus recommend that the Commission approve the Plan, subject to the terms
of this Agreement
The Parties look forward to presenting this Agreement to the Commission.
We are available to respond to any questions the Commission or its staff may
have. We appreciate the Commission's consideration of this Agreement, and
look forward to resolution of this proceeding.
Sincerely,
P FE
C ' ' OF ' ,.. LATORY AFFAIRS
(612) 330-6125
Attachment
c. Service List
ATTACHMENT 1
DING PLANT REHA.BILITATION PROJECT
SCOPE OF PROJECT
This project focuses on reducing emissions and sequentially refurbishing the
existing plant equipment for additional life at a capacity similar to the unit's
original design rating. Emissions reductions will be achieved by means of air
quality control system (AQCS) equipment consisting of a selective catalytic
reduction ( "SCR ") reactor for control of N O emissions, a spray dryer absorber
( "SDA ") lime -based semidry flue gas desulfurization ("FGID") system for
control_ of SO, emissions, and a pulse -jet cleaned fabric filter ("PJFF") for
control of particulate matter. The boiler, turbine, and other balance of plant
systems will. be repaired or replaced as necessary to extend their useful life and
support the operation of the new AQCS equipment.
The plant will be modified in accordance with the scope of work described
herein. The Sections that follow describe the major aspects of the project.
While this document outlines many specifics of the project, it is not an .
exhaustive list of all details. The limits of the scope of work will be as defined
during detailed design. The scope of work to be conducted on each of the
components and/or systems discussed herein is assumed to include all work
(design, manufacturing, fabrication, delivery, installation, and commissioning)
necessary for reliable and efficient operation of a full and complete installation
in. accordance with all applicable local, state, and federal codes and regulations.
AQCS ]ECZUIPMENT UPGRADES
The new AQCS equipment for the rehabilitated steam generator will consist of
a SCR reactor for control of NO emissions, a lime- based semidry FGD system
for control of So, emissions, and a PJFF for control of particulate matter.
NO Control
The flue gas leaving the economizer section of the steam
generator will be directed to a new SCR reactor. The SCR
reactor includes the reaction vessel, support structure (including
foundations and/or piling as may be required), access platforms,
walkways, stairs, and lighting. The SCR system consists of an
ammonia injection grid ( located upstream of the reactor
SCOPE OF PROJECT
King Plant Rehabilitation Project
Page 2 of 7
and two or more layers of titanium- vanadium - tungsten based
catalysts located inside the reactor. Ancillary equipment includes
catalyst change out handling equipment (lifting devices and their
controls, as well as support structures) and reagent (ammonia)
receiving, handling, storage, preparation, and delivery systems.
Existing Electrostatic Precipitators
Pending results of a condition assessment of their internal
components, the existing ESPs are intended to be re -used with
minor upgrades. Required modifications include installation of
equipment necessary to improve electrical sectionalization,
replacement of existing discharge electrodes and their support
system with a current rigid discharge electrode design, and
stiffening of the ESP shell as required for the balanced draft
conversion.
SO, and. Particulate Matter Control
The flue gas leaving the ESPs will be directed to two 50 percent
capacity semidry FGD absorber modules and one 100 percent
capacity PJFF. Lime slurry may be combined with a slurry of
recycled solids from the fabric filter to form the reagent slurry.
The reagent slurry is injected in the absorber where the lime reacts
with the flue gas SO,. The reaction products, unreacted reagent,
and fly ash suspended in the gas stream are then collected by the
fabric ri filter.
The TUFF is a multicompartment fabric filter using tubular filter
bags to remove the FGD byproducts and fly ash from the flue
gas. Each compartment contains several hundred individual filter
bags. The clean flue gas leaving the fabric filter is directed to two
new induced draft fans. The flue gas is then sent to the two inlet
breechings of the existing chimney.
Scope of work includes design, fabrication, and installation of
spray dryer absorbers, fabric filters, lime systems (receiving,
storage, handling, preparation, and delivery), reagent slurry
(preparation, storage, handling, and delivery), and scrubber b y-
product (transportation, storage, handling, and shipping) systems.
Balanced Draft
To accommodate the additional draft requirements resulting from
the installation of the SCR and AQCS equipment, the unit will be
converted to balanced draft operation. The unit would be
converted to balanced draft operation by installing ID fans and
making the appropriate changes to the steam generator and
connecting ductwork. Balanced draft modifications include the
design, fabrication, delivery, and installation of Induced Draft
fans, motors, foundations, controls, dampers, inlet and discharge
ductwork, and electrical supply equipment.
STEAM TURBINE GENERATOR
The existing steam turbine generator is the unit that was originally
installed when the plant was constructed. The existing steam turbine
and the existing exciter have reached the end of their respective useful
lives, and will be replaced. The existing generator will be re -used. Steam
Turbine replacement scope includes entire new High Pressure,
Intermediate Pressure, and Low Pressure sections; foundation
modifications as necessary to receive the new machine; new steam chest,
control valves, and EHC (eJectro4iydtau1ic control) system, as well as
piping replacements, additions, or modifications as required to connect
the new turbine to the existing HP steam system. The new Exciter will
be of a brushless design.
STEAM GENERATOR
SCOPE OF PROJECT
King Plant Rehabilitation Project
Page 3 of 7
The existing steam generator (boiler) is a supercritical, constant
pressure, cyclone -fired unit designed by Babcock & Wilcox ("B&W")
and put into operation in 1968. The steam generator MICR was reduced
due to a switch to low sulfur coal in the 1970s. Several options to return
the boiler to its original design steam flow have been proposed. The
following work is currently contemplated: replacement of the furnace
floor and support system, replacement of the studded portion of the
lower furnace sidewalls, installation of new cyclone burners and re-
entrant throats, stiffening as may be required by the Balanced Draft
conversion, installation of new secondary air dampers, installation of a
rear wall arch, and potential addition of reheat and/or superheat surface
as may be necessary to control steam temperatures. Dismantling of the
BALANCE-OF- PLAN'I' EVALUATION
SCOPE OF PROJECT
King Plant Rehabilitation Project
Page 4 of 7
lower portions of the furnace will necessitate temporary relocation
and /or permanent modification or replacement of the existing bottom
ash slag tank and handling system.
The major balance -of -plant ( "BOP ") equipment was reviewed to
determine which components will require repairs or replacement as part
of the rehabilitation. Key portions of the balance of plant scope of `cork
to be conducted are as follow:
Auxiliary Power System
Portions of the existing plant electrical system will be inspected,
cleaned, and repaired as required for long -term reliable service.
Portions of the system - will be refurbished and upgraded with new
solid -state protective relays. The Main Transformer outlet
connection to the plant substation will be relocated; relocation to
include replacement of towers and conductors. Additional 115 kV
to 4160 volt substations, motor control stations, and other
electrical equipment will be required to power the new AQCS,
SCR, Cooling Towers, and. Balanced Draft equipment, controls,
and related devices. Verification of the electrical system capacity
and condition will. be required during detailed design. when all new
loads have been confirmed.
Distributed ontrol System.
A microprocessor-based Distributed Control System ('DCS') will
entirely replace the existing plant control system. An Emerson
'Ovation' system will replace the existing Bailey Net 90' controls.
Ovation is the standard DCS system within the Xcel coal plant
fleet. The DCS will include control, information, and historian
functions, as well. as performance monitoring and cpthiiization
functions.
Cooling Tower and. Circulating Water System
The current cooling water system is nonce- through system with
inlet and discharge canals. The plant heat rejection scheme is to be
studied as part of the environmental permitting process. It is likely
that a hybrid system will result. The anticipated hybrid system
Coal Handling system
Scope of work includes a comprehensive
study of existing equipment and systems.
Improvements will address operating
efficiency and control /reduction of ground
level fugitive dust.
SCOPE OF PROJECT
King Plant Rehabilitation Project
Page 5 of 7
would provide operation in two modes: `once Through' cooling,
as currently configured, and `Closed Loop' cooling using newly
installed mechanical draft cooling towers. Scope of work will
include design, fabrication, and installation of new mechanical
draft cooling towers and basins, modification and/or replacement
of existing circulating water piping; modification, relocation,
and/or replacement of the existing circulating water pumps; and
modification or replacement of the intake screens. Potential
modification of the inlet and discharge canals may include design,
fabrication, and installation of weirs and /or gates for closed loop
operation. Final configuration details are pending based on the
terms of the water -use p ertnitting process.
Cold Reheat (CRH) piping
The Cold Reheat (CRH) piping is a section of the high-energy
steam piping system connecting the boiler and the turbine. The
existing CRT pipe has reached the end of its metallurgical life,
and will be replaced. Scope of work includes design fabrication,
and installation of pipe, hangers, anchors, attachments,
instrumentation (pressure, temperature, and flow), insulation, and
lagging.
Other Balance-of-Plant Equipment and Systems
Following is an indicative listing of other systems and equipment
that will require inspection, rehabilitation, or replacement.
Additional details will be developed during detailed engineering
design.
Ash Handling system
The existing Ash Handling system will be
modified as required to integrate its operation
Hi ! h-ener
with the newly installed scrubber by-product
handling system.
sa sic"' * and han ers
In addition to the CRS- -I work described
above, the balance of the high energy piping
systems - will be inspected, adjusted, repaired,
or replaced as necessary to insure reliable
operation.
Feed system
In addition to the inspection, adjustment,
repair, or replacement of the feed-water piping,
pumps and drives, and heaters, the #15B
heater has reached the end of its useful life,
and will be replaced.
Condensate system
Auxiiia Cool.i.n• Water s Tstern
D emi_neraliz e d Water system
These systems, each of which is critical to
plant operation, will be inspected, adjusted,
repaired, or replaced as necessary to insure
long term, reliable operation.
SCOPE OF PROJECT
King Plant Rehabilitation Project
Page 6 of 7
Auxiliary • Boiler.
Rework of the furnace bottom will necessitate
the relocation of the exisiting Auxiliary Boiler.
Based on results of a recent condition
assessment, economics favor replacement of
the Aux Boiler when compared to
dismantling, relocating and reassembling the
existing Aux Boiler.
Fire Protection Sys tem
The configuration of the existing fire
protection system will be reviewed in light of
the other modifications and upgrades made to
the plant equipment. The fire protection
SCOPE OF PROJECT
King Plant Rehabilitation Project
Page 7 of 7
system will be replaced, modified, and/or
upgraded in accordance with
recommendations and requirements of Xcel's
property insurance carrier.
July 6, 2004
1 E nergy sM
Mayor, Council Members, Management and staff
City of Oak Park Heights
14168 Oak Park Boulevard North
P.O. Box 2007
Oak Park Heights, Minnesota 55082 -2007
1103 King Plant Road
Bayport, Minnesota 55003 -1000
Dear City of Oak Park Heights Representatives:
1 have been asked to further clarify the tax implications of the MERP project for
the surrounding areas we serve and particularly the City of Oak Park Heights.
Based on what we know now, xcel Energy anticipates all the boiler and turbine
project costs would be taxable. The tax information in the letter 1 sent you dated
� f
June 28, 2004, is based on the boiler and turbine costs not qualifying for a tax
exemption. Please keep in mind that the Minnesota Department of Revenue is
the governing agency.
1 appreciate the help and advice we continue to receive from oak Park Heights in
support of this project.
if y ou have additional questions and concerns about the property tax or the
MERP project, please feel free to contact me.
Sincerely,
Mark J. Fritsch
Director
Alien S. King Generation Plant
EXHIBIT 12
Enclosure 13
was unavailable at time of deliver and will be distributed
under separate cover as soon as possible.
City of Oak Park Heights
14168 Oak Park Blvd N.• Box 2007 • Oak Park Heights, TVIN
July 13, 2004
• 439-4439 • Fax 439-0574
TO: Planning Commission embers
FROM: Eric Johnson, City As iinistrator
RE: Estimate Tax Impacts o he MERP Oak Park Heights.
Xcel Energy has made application for a conditional use permit for improvements Alien S.
King Generation Plant. The applications are to accommodate a $382 million dollar plant
upgrade that would install state of the art pollution control equipment. This project is
generally known as the MERP (metropolitan emission reduction project) project. The
MERP project to begin in 2004, with completion expected in 2007. The peak of
construction will be in 2006 and early 2007. At the time of peak construction, up to 300
temporary construction workers could be involved in the project.
To fund this project for Xcel Energy (an INVESTOR OWNED UTILITY - for profit), on
December 18 2003 the Minnesota Public Utilities Commission approved a "rate rider"
allowing Xcel Energy to pass the costs of this MERP project to its customers.
Xcel has submitted documentation that makes the following statements relative to
the tax implication to Oak Park Heights:
1) The estimated current Property Tax from the AS King Plant is $2 million.
Of this amount the City receives $360,000 +I- and is 18 percent of the City's General Fund Revenue.
2) The MERP upgrade will add approximately and addition 2.2 million dollars
to the total Property Tax, bringing the total to $4.2 million.
Of this amount the City would then receive 756,000+1-.
3) Xcel has stated, June 28 2004 memo that these figures include that approxi-
mately one-half of the project would qualify for the Pollution Exemption as allowed
in -272.02*
Xcel further comments that this final determination is subject to review by the Minnesota Pollution
Control Agency and also the Dept of Revenue. Further, Xcers letter of July 6 expressly states that they
anticipate that the BOILER AND TURBINE would not qualms for the Exemption, These are the largest
elements of the MERP project.
Should these estimations become reality in 2007+1- the MERP project would indeed a tax
base win for the City of Oak Park Heights, the School District and Washington County.
However, the City has not been given a guaranty from Xcel that the BOILER and
TURBINE or any other portion of the project will remain taxable.
EXHIBIT 13
To date, the City Council has passed resolutions generally supporting the proposal, (O3
12-61), but has significant concerns on the future of the A.S. King Plant's role in our
community as a large taxpayer. This concern is relevant as this tax benefit was
demonstrated and represented to Oak Park Heights as a massive incentive (tradeoff) to
allow such plant to be constructed in our community. Accordingly our residents must live
with the following impacts - such as:
View of such plant in our waterway - depreciating values,
Impact on skyline - depreciating values,
Coal dust, train noise, long-term remediation (environmental) issues,
Significant acreage that cannot be developed due to proximity to Plant,
Increased security risk.
In effect, if the tax dollars were not being generated in the magnitude that they currently
are, the A.S. King Plant facility has limited benefit to the Oak Park Heights community.
The taxes being generated should at the very least be considered as fair and equitable
compensation for the social, economic and environmental costs to Oak Park Heights and
its residents for hosting this facility. Should a plant of this magnitude be proposed today,
such development would more than likely not proceed due to local opposition and would
certainly not occur without specific development agreements guaranteeing to the host
community specific benefits as would be incorporated into an appropriate Development
Agreement
*Minnesota Statute 272 02 grants personal property tax exemption to Utilities for the installation
of equipment that is directly related to Pollution Abatement" However, this exemption has been
applied broadly by the Department of Revenue upon the application of IOUs (Investor Owned
Utilities) and have included items such as buildings, safety equipment and parking lot paving
because of their roles in the overal 1 pollution control effort - even through these are only
tangentially related to pollution abatement - at best.