CPS Energy is spending $28.7 million to replace a generator at the heart of its newest coal plant after equipment failures that originally date back to 2014, utility executives said at their December board meeting.
A new 345-ton generator built by Mitsubishi Hitachi Power Systems recently made its way on huge transport trucks from the Victoria area to CPS Energy’s J.K. Spruce 2 coal-fired units at Calaveras Power Station, the utility’s senior vice president of power generation, Benjamin Ethridge Jr., told board members on Monday.
“This is a more rugged design,” Ethridge said. “This is a stronger generator. We went to great lengths to make that happen.”
Russell Seal, a member of the local Alamo Group of the Sierra Club focused on pushing the utility to move away from fossil fuels, said CPS Energy executives should have informed the public earlier about the issues with the generator, which Ethridge said first began in November 2014.
Monday’s briefing came after the San Antonio Express-News reported last week on the generator’s journey through South Texas. After the meeting, CPS Energy’s Board Chair John Steen said he wasn’t aware of the replacement until he read the Express-News article.
“They should have talked about it ahead of time before they start bringing in this thing the size of a football field,” Seal said. “They would have snuck this in if the [newspaper] hadn’t reported on it. Nobody would have known.”
Spruce 2 opened in 2010 and cost the municipally owned electric and gas utility around $1 billion to build, CPS Energy President and CEO Paula Gold-Williams said.
“Ultimately, we want this unit to be able to produce fully,” Gold-Williams said. “We have not been able to consistently run that unit at the maximum capacity because of this concern for the stress on the generator.”
At the meeting, trustee Willis Mackey, who represents the southeast quadrant of the utility’s service, questioned CPS Energy staff about the warranties on the old and new units.
The original generator, built by Toshiba, had an 18-month warranty, utility officials said. The new generator has a five-year warranty.
Mackey also asked utility executives to bring issues like this to the board in the future, to which Gold-Williams responded, “Absolutely.”
The original generator ran for roughly 4½ years before failing in November 2014, Ethridge said, calling the event “a bad day for us at CPS Energy.” Later investigations by CPS Energy and Southwest Research Institute revealed the generator had a temperature sensor with “improperly routed” wiring, Ethridge said.
The utility’s staff tried to work with Toshiba to resolve the issue, Ethridge said. They were able to resume operating Spruce 2, but at a lower capacity, Gold-Williams said.
“We did notice some vibration issues, and we felt like it was not performing to its peak,” she said.
CPS Energy received a $9 million insurance claim for the generator, officials said. It covered the cost of some repairs but not the expense of replacing the generator, Chief Legal and Administrative Officer Carolyn Shellman told the board.
Gold-Williams said the replacement would help Spruce 2 operate for the length of its intended lifespan, which she put at 40 to 60 years. In CPS Energy’s “Flexible Path” plan released this year, utility officials have said Spruce 2 will still be running in 2042, though they plan to close Spruce 1 by 2030 instead of 2047, as originally planned.
Cris Eugster, CPS Energy’s chief operating officer, said they looked at what it would cost to continue running Spruce 2 with the old generator and use solar energy to make up for the lost capacity, a figure he put at 185 megawatts.
At $1 per watt, CPS Energy would have to spend $555 million on solar to make up those 185 megawatts, Eugster said. Such a project would also require battery storage.
One significant reason for the cost difference is that solar farms are only online about one-third of the time a coal plant can be online, he said.
Seal said he initially felt “very, very negative” about the additional investment in Spruce 2 but was reassured somewhat by the utility’s presentation on Monday.
“We want these things to run right, we want them to be most efficient and to get the most bang for the buck,” Seal said. “But the bottom line is we have to shut these coal plants down.”
Seal, who also volunteers as part of San Antonio’s Climate Action and Adaptation Plan, said CPS Energy needs power most during times of the day where demand hits a high point, also known as the peak.
“We need to be taking care of the peak, and coal plants are not the way to do it,” he said.
Ethridge said utility staff have finished inspecting the new generator and plan to have it put on its foundation at Calaveras by Thursday. The replacement should be complete by Feb. 5, he said.