In an Owensboro Utility Commission work session Monday, officials recommended to the board a $21.9 million plan to decommission Elmer Smith Station, calling for the removal of both chimney stacks. Pending budgetary approval by the commission, Owensboro Municipal Utilities officials estimate complete decommissioning of the Highway 144 power plant by June 2021.
OMU hired Kansas City, Mo., consulting firm Burns & McDonnell for $60,000 to assess three decommissioning costs for retiring the station — with and without stack removal and full demolition. The three options ranged from $13.4 to $36.9 million.
OMU opted to complete their own study of the decommissioning options, using the Burns & McDonnell assessment as a guide, but utilizing the utility’s manpower as much as possible.
One significant factor for OMU was Burns & McDonnell’s recommendation of asbestos encapsulation. With the heavy use of asbestos insulation throughout both Unit 1 and 2 of ESS, OMU opted for asbestos abatement in their final analysis, adding $3 million to Burns & McDonnell’s projected costs.
“Encapsulation of asbestos is really a temporary measure at best,” said Brad Howton, director of production. “Once the facility deteriorates, the weather gets in, the encapsulation breaks down and the problem gets bigger, quicker.”
Howton said that asbestos abatement is the best long-term option for OMU to mitigate further costs down the road.
OMU General Manager Kevin Frizzell said that the public utility plans to use $8.3 million in a facilities fund for decommissioning ESS, with the remainder coming from the utility’s $40 million reserve fund.
“We do not believe this will have an impact on our rate forecast,” he said, adding that his financial team will analyze different options and timelines to help ensure that rates are not affected.
By opting to retire ESS in place and removing the stacks, OMU will incur the most cost — over $8 million — in closing the site’s three ash ponds, removing all coal combustion residuals for off-site disposals. Those materials are currently taken to the Daviess County Landfill and Peabody Coal Company. Officials said these ponds could be used for the nearby Cavin Water Plant in the future.
By removing the stacks, OMU would no longer maintain required Federal Aviation Administration hazard lighting, which saves maintenance costs. The two stacks, one 650 feet tall and the other 400, cannot be toppled because of the proximity of the switchyard, or “lifeline” as OMU officials call it. Instead, it will be taken down in smaller sections from the top. OMU took down a 350-foot Unit 1 stack in 1992, following a similar method.
“With the initial decommissioning activities, the stack removal can be moved out to a later date if needed,” Howton said.
According to a preliminary timeline presented to the commission Monday, both ESS units will be decommissioned by July 2020. By December 2020, the ash ponds will be closed and by January 2021 the asbestos will be removed. The two stacks will be demolished by June 2021, completing the project.
Once the stacks are removed and the plant is decommissioned, only 25 acres of the 175-acre property will be sellable, officials said at Monday’s work session. But with the switchyard and Cavin Water Plant remaining, the site will be landlocked and not suitable for development, Frizzell said, despite it’s desirable riverfront location.
“We’re going to be in that switchyard as long as we are providing power to the city. That’s not going away,” Frizzell said. “Really, if you look at this future for other options, there’s not a lot there.”
While looking at the decommissioning of ESS, OMU officials also developed a cost analysis for the closing of Plant A of the water treatment facility. For this closure, they recommended to the board the least expensive option, which retires the structure in place for $300,000. Other options including full demolition, which would cost $8.2 million or replacement which would cost $16 million.
All plans discussed at Monday’s work session will be voted on after a final financial forecast is presented to the utility commission during the fiscal year 2021 budget process.
