PSCW Approves Application for Largest Biomass Plant in Midwest

The project, estimated at $58.1 million, will require additional biomass receiving and handling facilities at the plant, an external gasifier, minor modifications to the plant's remaining coal-fired boiler and an enhanced air quality control system. The total generation output of the plant is not expected to change significantly as a result of the project.

"We appreciate the PSCW's fair and thorough review of the application and believe that their decision recognizes the benefits of this project to provide environmentally-responsible, cost-effective energy to our customers and communities," said Mike Swenson, president and CEO, Northern States Power Company-Wisconsin, an Xcel Energy. "The Bay Front project demonstrates our continuing commitment to the environment and a clean energy future. We're helping our customers and communities practice sustainability while increasing local economic development."

Through its purchases of wood residues and related services, the Bay Front Power Plant has a $20 million annual economic impact on a six-county region around Ashland. That economic impact will increase as the plant purchases more wood residues from area contractors.

The Bay Front Power Plant was originally constructed and began operation in 1916. In 1960, it operated five boilers and six turbines. Since then, two of the boilers, and three of the turbines, have been retired. The three remaining boilers feed into a combined steam header system that can support three turbine-generator sets.

In 2008, Xcel Energy installed NOx (nitrogen oxides) emission control equipment on the two boilers that primarily burn wood, allowing both to continue to operate into the foreseeable future. When evaluating various alternatives for the remaining boiler, which primarily burns coal, it was determined that expanding Bay Front as a biomass resource was preferred over incurring significant increases in coal costs, and also environmental compliance costs relating to the Clean Air Interstate Rule and regulations on mercury emissions.

In addition to reducing carbon dioxide emissions by switching from coal to biomass in the remaining unit, the project will drastically reduce other air emissions, including nitrogen oxides by more than 60 percent and sulfur dioxides and particulate matter by more than 80 percent.

The primary source of biomass at Bay Front is expected to be the lower quality, unused materials that are currently left in area forests following traditional harvests, such as treetops, logging slash, damaged trees, underutilized species, and the cull and mortality classed trees. Initial investigations conducted by Xcel Energy show more than ample supplies of this lower quality biomass within the area.

"We will require our contractors to use the sustainable harvesting guidelines as developed by the Wisconsin Council on Forestry and implemented by the Wisconsin Department of Natural Resources (WDNR)," Swenson said. "We will also continue to work closely with the WDNR and other local organizations to ensure the highest environmental standards are followed now and in the future when harvesting biomass in the region."

Engineering, design and construction work is expected to begin in 2010 and the unit could be operational in late 2012.

Xcel Energy (NYSE: XEL | Quote | Chart | News | PowerRating) is a major U.S. electricity and natural gas company with regulated operations in 8 Western and Midwestern states. Xcel Energy provides a comprehensive portfolio of energy-related products and services to 3.4 million electricity customers and 1.9 million natural gas customers through its regulated operating companies. Holding company headquarters are located in Minneapolis. More information is available at www.xcelenergy.com.

SOURCE: Xcel Energy

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