Ameren Missouri to delay retiring 1,195-MW Rush Island coal plant under MISO reliability contract

Source: By Ethan Howland, Utility Dive • Posted: Tuesday, August 23, 2022

Caterpillar tractors collect black coal pile.Artur Nyk via Getty Images

Dive Brief:

  • Instead of retiring its 1,195-MW Rush Island power plant on Sept. 1, Ameren Missouri will likely keep it running until mid-2025 to support grid reliability, the Midcontinent grid operator said in a Friday filing at the Federal Energy Regulatory Commission.
  • Shuttering the plant near Festus, Missouri, could cause severe voltage stability problems, leading to cascading power outages, the Midcontinent Independent System Operator said in an application for a 12-month system support resource agreement that can be renewed annually. The contract will be paid for by load-serving entities that benefit from keeping the plant running.
  • MISO identified four transmission upgrades that are needed to maintain voltage on the grid, with the last one expected online by June 2025, according to the grid operator. Potential renewable energy additions or possible demand-response programs wouldn’t adequately address the voltage problem, according to the grid operator.

Dive Insight:

The filing at FERC comes as MISO is working to maintain grid reliability as it deals with a thin reserve margin in its north and central regions.

MISO in April said there was a heightened risk of rolling blackouts this summer after a capacity auction indicated the grid operator may not have enough capacity on the hottest days when demand surges. The shortfall could persist for several years, according to a MISO report released in June.

Plans to retire power plants in Wisconsin have also been pushed back over reliability concerns.

Power plant owner’s must get MISO’s approval to retire a generating facility. The grid operator can enter into a system support resource agreement to keep the plant running if it finds shuttering the facility would cause reliability issues.

After a legal dispute with the Environmental Protection Agency that lasted more than a decade, St. Louis-based Ameren in December proposed retiring the Rush Island plant earlier than planned instead of installing a court-mandated flue gas desulfurization system at the plant by March 31, 2024, to reduce air pollution.

In a June court filing, Ameren Missouri proposed running the Rush Island plant less, mainly by limiting operations to peak demand times and emergencies until it is retired. Ameren expects the court will respond to the company’s request for an extended retirement date and the planned change to the plant’s operations, Ameren said in an Aug. 8 Securities and Exchange Commission filing.

In the meantime, MISO has approved needed transmission upgrade projects to facilitate Rush Island’s retirement, according to the filing. Ameren Missouri has started design and procurement activities for the upgrades and expects to complete them by late 2025, its corporate parent said.

Ameren Missouri expects to finance Rush Island’s planned accelerated retirement by issuing securitized bonds. The Missouri Public Service Commission will need to approve the utility’s plan.

Rush Island had a net plant balance of about $600 million and a rate base of about $500 million as of June 30, according to Ameren. In a rate case decision issued in December, the PSC based Ameren’s depreciation rates on a 2039 retirement date for the Rush Island plant, the utility company noted.

MISO’s reliability concerns are driven by Ameren’s “well-documented pattern of delay,” Andy Knott, central region director for Sierra Club’s Beyond Coal Campaign, said Monday in an email.

“Ameren’s recent experience retiring its Meramec coal plant provided the blueprint for what was needed at Rush Island, which could have avoided the grid reliability concerns being raised now,” Knott said. “A major concern we have right now is how Ameren will be held accountable for its Clean Air Act violations and the continuous, ongoing harm from its unpermitted sulfur dioxide emissions over the past decade.”