Fiscal Note
Currently, $971,000 is available in the Contingent Reserve. There are, however, known costs in 2008 that have been funded by Contingent Reserve in the past. Using Contingent Reserve as the exclusive funding source for these costs would consume the balance of $971,000.
Title
Approving the transfer of $25,000 from the Contingent Reserve to the State of Wisconsin for the purpose of studying the future of many of the coal-fired heat and power plants in Madison in partnership with the State of Wisconsin Department of Administration, the University of Wisconsin-Madison, and Dane County.
Body
WHEREAS, the City of Madison has several coal-fired power plants, including the State of Wisconsin's Capitol Heat and Power Plant, the University of Wisconsin's Charter Street Heating Plant, and Madison Gas and Electric's Blount Street Power Plant; and
WHEREAS, the Clean Air Act and Amendments of 1990 define a "nonattainment area" as a locality where air pollution levels persistently exceed National Ambient Air Quality Standards, or that contributes to ambient air quality in a nearby area that fails to meet standards; and
WHEREAS, designating an area as nonattainment is a formal rulemaking process, and EPA normally takes this action only after air quality standards have been exceeded for several consecutive years; and
WHEREAS, EPA designations of nonattainment areas are only based on violations of national air quality standards for carbon monoxide, lead, ozone (1-hour), particulate matter (PM-10), and sulfur dioxide, and EPA will be making a designation regarding particulate matter (PM 2.5) soon; and
WHEREAS, Dane County is at risk of being designated non-attainment particulate matter (PM 2.5) and also needs to be concerned about being designated non-attainment for ground level ozone; and
WHEREAS, since spring of 2007 representatives from the Wisconsin Department of Administration, the University of Wisconsin, the City of Madison, and Dane County have begun preliminary work to study the future of many of the coal-fired heat and power plants in Madison, including those mentioned above; and
WHEREAS, the draft scope of the study is to investigate, analyze, and recommend on a plant-by-plant basis the optimum configuration of the plants to serve their heating, cooling, and power generation load base by addressing the following three key parameters: environmental concerns (carbon footprint, emissions, regulations, etc.), reliability, and cost (construction, operation, energy, etc.); and
WHEREAS, the options will be analyzed and graded using a scorecard to summarize the quantitative and qualitative characteristics relating to the above parameters, as well as how each option complies with State of Wisconsin Executive Orders, Energy Policies, and State Statute requirements; and
WHEREAS, these options include:
1. Charter Street Heating Plant
a. Investigate viability of two 350,000 PPH CFB solid fuel boilers that would utilize up to 40% renewable energy sources with 21 MW back pressure steam turbine
b. Two 350,000 PPH gas/oil boilers with a 21 MW back pressure steam turbine located at Mills Street property
c. Option from Public Forum
d. Best Available Control Technology (BACT) on all four boilers, looking at each boiler independently;
e. Viability of Integrated Gasification Combined Cycle (IGCC)
2. Capitol Heat and Power Plant
a. Combined cycle cogeneration using gas combustion turbines and heat recovery steam generators
b. District Heating Option (a separate report will be developed documenting the viability of a district heating system serving the Capitol complex, as well as an expanded customer base along the East Washington Rail Corridor
c. Implementation of a solid fuel boiler on site that is capable of burning biomass fuel (it is assumed that a gas/oil boiler will be installed as backup)
3. Combined Plant Siting
a. Investigate an option to supply both the Charter Street Heating Plant steam loads and the downtown Madison thermal loads from one plant. This plant would be sized to handle 700,000 PPH of the Charter Street steam loads, the entire existing Capitol Heat and Power steam loads, and the new thermal loads identified in the district heating option, 2 b. Fuel sources for this option would be the same as options 1 and 2 above and would include exploring the use of solid fuels, biomass and natural gas/oil.
4. Walnut Street Heating Plant
a. Combined cycle cogeneration using gas combustion turbines (similar to MG&E/UW West Campus Cogeneration Facility) and heat recovery steam generators (HRSG)
b. Replace Boiler 1 & 2 with Gas/Oil units
5. MG&E Blount Street Synergies
a. Investigate the use of MGE's Blount Street Power Plant location and other downtown MGE properties as locations for the large one plant option, 3 a. and the Capitol Heat and Power Options 2 a., 2 b., and 2 c
6. Third Party Purchase
a. Investigate the viability of the state selling the plants within this study to a third party (this involves contacting some appropriate parties and discussing the feasibility)
7. WCCF Options
a. Investigate the purchase options available to the State under the Joint Ownership Agreement for the West Campus Cogeneration Facility (these options would acquire a 45 MW interest in the plant, as well as enter into a power purchase agreement for 45 MWs of capacity)
WHEREAS, progress to date includes a tour of the facilities, data gathered for basic services of sites, analysis of district heating around the East Rail Corridor, development of a scorecard template, initial steps to identify fuel sources and emissions impacts, a trip to St. Paul to tour their district heating, and a town hall meeting scheduled on Feb 21, 2008; and
WHEREAS, the parties involved agreed to share the cost of this study. The breakdown of costs include the City of Madison, Dane County, and MGE contributing $25,000; and the State of Wisconsin-DOA contributing $300,000; and the University of Wisconsin contributing $675,000 $975,000; and
WHEREAS, this funding for the City of Madison was not budgeted in the 2008 budget and the funds for this study would need to come from the contingent reserve;
NOW, THEREFORE, BE IT RESOLVED, that the Common Council hereby approves transferring $25,000 from the contingent reserve to the State of Wisconsin for the purpose of conducting the above study.