diversification fuels JEA’s reputation

Ron Whittington, JEA

Over the last eight years, JEA has made a $1 billion investment in efficient, clean new power generation, at the same time receiving broad community support for its efforts. The utility has successfully added natural gas, coal, petroleum coke, biomass and solar power to its fuel portfolio. These efforts have also helped JEA achieve a 13-year hiatus on residential rate increases for its customers.

“Increasing fuel costs will finally force us to raise rates on the electric side this year, but we’ll still have the lowest electric rates in Florida,” said incoming JEA CEO Jim Dickenson, who has been with the utility in a variety of capacities over the last 30 years. “Diversification gave us the ability to switch to cheaper fuels, and enabled us to hold the line on rate increases for more than a decade.”

Northside makes the shift

JEA has probably received the most publicity from its Northside Gen-erating Station (see photo). The Northside plant, which dates from the 1960s, originally burned a combination of oil and natural gas. Although its efficiency was low, its output–while relatively expensive–was important to JEA.

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“By the mid-1990s, electricity demand was growing by more than three percent a year, and JEA faced a dilemma,” Dickenson said. “Should it continue generating all the power its customers needed? Or should it buy power on the wholesale market? JEA chose to make the most of its existing fleet by upgrading facilities and diversifying fuel sources.”

JEA’s Northside Generating Station, with a capacity of more than 1,000 MW, was an obvious candidate for repowering. In a review of fuel options, JEA rejected natural gas because of pipeline availability constraints. It also turned down Orimulsion, a bitumen-based product similar to very heavy fuel oil, because regulators took a dim view of it. That left only two solid fuels: coal and petroleum coke.

Petroleum coke, commonly known as pet coke, is a byproduct of the petroleum refining industry and is an extremely low-cost fuel. Coal, which accounts for just over half of all U.S. electricity generation, is also a low-cost fuel. Together, coal and pet coke would enable JEA to cut its power production costs at the plant in half.

But, burning solid fuel was not an option unless it could be done cleanly. So JEA turned to a technology that would minimize emissions-circulating fluidized-bed (CFB) combustion. Aware that the U.S. Department of Energy (DOE) was looking for partners to share the cost of demonstrating this technology, JEA approached the agency. DOE liked what it saw: a utility committed to expanding its generating capacity, an engineering team capable of working with a sophisticated system and the sheer size of the effort.

JEA’s decided to repower two of the three units at Northside. In the end, units 1 and 2 would be rated at a total capacity of nearly 600 MW, making them the biggest CFBs in the world. DOE chose Northside’s unit 2-shut down since the mid-1980s because of boiler problems-for its Clean Coal Technology Demonstration Program.

JEA estimated it would cost $309 million to repower the unit. DOE agreed to provide about one-quarter of that amount, $74 million. JEA funded the $321 million cost of repowering unit 1. Repowering meant obtaining all the necessary state permits and, as with all power projects, it had to comply with the National Environmental Policy Act.

“Before JEA could satisfy the regulators, however, it had to satisfy the community,” Dickenson said. “When the project was still in the planning stage, JEA sent letters to community groups and stakeholders in the Jacksonville area.”

“We wanted to be the first, and best, source of information,” said Susan Hughes, JEA’s vice president for environmental services. “Solid fuel is a big deal.”

Key to the company’s outreach effort was a commitment it made to the Jacksonville/Northeastern Florida community to reduce emissions from the plant by at least 10 percent compared with a 1994-1995 baseline. JEA also promised to reduce groundwater use by at least 10 percent.

“Reaching out to the community took time and effort and probably increased JEA’s costs,” said Janet Stanko, energy issues chair of the Sierra Club of Northeastern Florida. But, it was the right thing to do. “A utility has such a high profile that it needs to have a positive relationship with the community.

“We’re not wild about solid fuel because of the emissions,” added Stanko. “But, when JEA sought our involvement, we came to understand that, if burned appropriately, it would be very efficient.”

“JEA has done a good job to ensure we’ll have the power capacity to keep pace with our projected growth,” Dickenson said. “JEA has replaced or modified about 40 percent of its electric generation plants. Over 30 percent of our power plants are less than 10 years old, compared to a national average of only 14 percent.”

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