Coal power for boiler

would produce savings

Baghouse would collect carbon dioxide and ash

before it leaves plant

By CHRIS VETTER

Journal Staff Writer

NEW ULM -- High natural gas prices may lead to a change in the choice of fuel burned in town.

The Public Utilities Commission is exploring the possibility of converting one of its boilers from natural gas to coal. The board approved the hiring of an engineering firm Tuesday to draw blueprints for the possible conversion. If all goes as planned, the city could be burning coal by December 2001.

Currently, the utility is paying about $4 per thousand cubic feet of natural gas. Bob Stevenson, director of the utility, believes that price will not go down in the near future.

Meanwhile, three coal suppliers are quoting prices in the range of $1.67 for thermal units of coal that are equivalent to the amount of energy created by the $4 natural gas measurement.

"These gas prices have caught us flat-footed," Stevenson told the commission board. "We didn't start seeing prices that would justify the switch until this July."

The utility has three boilers that burn natural gas. Under the proposal, the utility would build a $2.35 million pulse jet baghouse, which would work as a vacuum cleaner, collecting carbon dioxide and ash before it leaves the plant.

"We force the flue gas through the bags and it catches the particles, to the point that you won't see anything," Stevenson said. "This will allow us to burn coal successfully."

Although the utility has a permit to burn coal, it hasn't been done for several years.

With the rising cost of natural gas and the availability of coal, Stevenson believes that the baghouse would pay for itself within four years.

"Continuing to burn gas when coal could be available is costing our ratepayers an extra $50,000 per month (assuming $4 gas)," Stevenson said in a memo to the commission.

According to a fiscal report, the utility can expect to save $600,000 a year through 2005 if the city burns coal in the third boiler.

If the utility does not make any changes to its boilers, it will spend $2.4 million for natural gas in 2002. However, with a coal-burning boiler, the utility would spend $1.2 million on coal and $550,000 on investment, operation and management costs (like disposing of ash), which produces the savings of $600,000.

One obstacle in the utility's way is financing. Stevenson hopes to build the baghouse without further bonding. The commission recently bonded for an $8 million gas turbine.

Other possibilities that would stop the commission from building the baghouse include the drop of natural gas prices or an order from the Minnesota Pollution Control Agency (MPCA) forbidding the project.

Stevenson has spoken with MPCA officials, and he hopes to get an official document from the agency in the near future approving the plan.

The other two boilers would not be converted to coal and would continue to burn natural gas. The older boiler was not designed to burn coal, and the utility is prohibited from burning coal in the second boiler because of a past environmental violation.

The utility will pay $24,0000 to STF Inc, an engineering firm from Toledo, Ohio, to design blueprints for the baghouse. Stevenson hopes to take bids on the project in early March, then award the bid at the March meeting. Construction would begin in late summer with a completion of December.

Baghouses have been in use at other coal-burning plants for about 25 years, Stevenson said.

"It's not new technology," he said.

The New Ulm plant can only burn bituminous coal, which comes from Kentucky and Illinois. The plant is not equipped to burn sub-bituminous coal, which is the type of coal that could be shipped across the Dakota, Minnesota & Eastern railroad through New Ulm.