Installing that equipment could save about 160 tons a year of carbon dioxide (CO2), which at a cap and trade rate of $30 a ton would cost less than $5,000 a year.
City officials are mulling over that information, even as a draft permit has been issued by the State Division of Air Quality for the proposed natural gas turbines upgrade to the 200 West power plant, here.
“The state said we’re required to install an oxidation catalyst to reduce CO2, and we’re questioning the cost benefit,” says City Manager Tom Hardy.
“We have asked for additional data from our manufacturer, and also air quality modelers to take a look at the data the manufacturer gave us,” he said.
Comparing the apparatus to a car’s catalytic converter, Hardy said each of two units would cost $300,000.
“At $4,800 (cost of CO2 produced without equipment installation), it would take more than 100 years” to pay that off, he said.
Those costs have to be weighed against the potential more stringent standards requiring the units’ installation that could be mandated within five or 10 years.
Regulations typically only get more stringent, they don’t go the other direction, the city manager said.
“We’re doing some modeling, but I think we’re going to respond to the state in the next week or two,” after which the state will set up a public comment period.
The final go-ahead to order the turbines could come by early fall, he said.
The $25 million or so project should be up and running by the early summer of 2012. That’s because such equipment isn’t kept in storage, but must be custom-made to specifications.
“We’re still on track, the costs look good. We need about a 12-month lead time to get the equipment,” Hardy said, extending the project over about 18 months.
The city will have to put 50 percent of the total unit cost down upon ordering. City officials have talked about bonding to finance the project.
“We’ll probably do a (power rate) increase upon bonding,” Hardy said, adding, “I don’t think we’ll see a rate increase until January of 2011.”
As previously reported in the Clipper, officials hope to keep the rate hike to 5 percent.
Previously explaining the rationale behind the project, Hardy said “natural gas prices have seemed to stabilize, are pretty economical. A nice thing about a natural gas plant is power can be turned on and off very rapidly – not like coal where you have to heat it up, and burn up a product that takes a while to go through.”
tbusselberg@davisclipper.com
Post a Comment
