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OPERATIONS & MAINTENANCE

HOW TO IMPROVE YOUR HEAT RATE

ON-SITE POWER

HOW ONE PROJECT MORE

THAN DOUBLED ENERGY EFFICIENCY

POWER PLANT
PERFORMANCE

WHERE DOES YOUR PLANT RANK?

the magazine of power generation

118
YEARS

A Report Card
on EPC Firms

December 2014 www.power-eng.com

1412PE_C1 1

12/15/14 11:35 AM

MATS regulations
Some clear, straightforward answers!

As were all aware, the MATS rule, efective in April 2015, mandates reduction of stack
emissions such as HCl, HF and Hg in coal-fred power plants. With compliance deadlines
so near, its time to ensure your power plants system satisfes the upcoming regulations.
Looking for answers to your regulatory questions? If you are considering whether to postpone
a plants retirement, or need assistance with technology and product choices, SOLVAir
Solutions years of practical experience in the feld may be of help. From cost-efective product
implementation to regulatory compliance, we ofer the experience and the knowhow to assist
you in fnding the answers you want.
For more information on Dry Sorbent Injection, sodium sorbents and independent tests
on HCl and SO2, go to www.solvair.us or call us at 800.765.8292.

Solvay Chemicals, Inc.

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1412PE_C2 2

12/15/14 11:35 AM

CORPORATE HEADQUARTERSPennWell Corp.

1421 South Sheridan Road Tulsa, OK 74112
P.O. Box 1260, Tulsa, OK 74101
Telephone: (918) 835-3161 Fax: (918) 831-9834
E-mail: pe@pennwell.com
World Wide Web: http://www.power-eng.com
CHIEF EDITOR Russell Ray
(918) 832-9368 russellr@pennwell.com
ASSOCIATE EDITOR Sharryn Dotson
(918) 832-9339 sharrynd@pennwell.com
ASSOCIATE EDITOR Tim Miser
(918) 831-9492 tmiser@pennwell.com

Power Engineering is the flagship

media sponsor for

FEATURES 118

22 Are They Meeting the

EPC FIRMS:

ON-LINE EDITOR Jennifer Van Burkleo

(918) 831-9269 jvanburkleo@pennwell.com
CONTRIBUTING EDITORBrad Buecker
CONTRIBUTING EDITORBrian Schimmoller
CONTRIBUTING EDITORRobynn Andracsek
CONTRIBUTING EDITORWayne Barber
(540) 252-2137 wayneb@pennwell.com
CONTRIBUTING EDITORBarry Cassell
(804) 815-9186 barryc@pennwell.com
GRAPHIC DESIGNER Deanna Priddy Taylor
(918) 832-9378 deannat@pennwell.com
SUBSCRIBER SERVICE
P.O. Box 3264, Northbrook, IL 60065
Phone: (847) 763-9540
E-mail: poe@halldata.com
MARKETING MANAGER Rachel Campbell
(918) 831-9576 rachelc@pennwell.com

Needs of Power Generators?

Read about how more than 30 top EPC firms performed in a survey
that measured utility satisfaction, factors behind firm selection, needed
improvements, and attitudes toward new construction and retrofitting.

28

2013 Operating Performance:

Coal Comes Back Slightly in 2013

Power Engineering lists the 20 best performing nuclear, coal, and combinedcycle power plants based on generation, capacity factor, and heat rate. Also
evaluated are NOX and SO2 emission rates for coal and combined-cycle plants.

38

SENIOR VICE PRESIDENT, NORTH AMERICAN

POWER GENERATION GROUP Richard Baker
(918) 831-9187 richardb@pennwell.com
NATIONAL BRAND MANAGER Rick Huntzicker
(770) 578-2688 rickh@pennwell.com

CIRCULATION MANAGER Linda Thomas

PRODUCTION MANAGER Katie Noftsger
POWER ENGINEERING, ISSN 0032-5961, USPS 440-980, is published
12 times a year, monthly by PennWell Corp., 1421 S. Sheridan Rd., Tulsa,
OK 74112; phone (918) 835-3161. Copyright 2014 by PennWell Corp.
(Registered in U.S. Patent Trademark Office). Authorization to photocopy
items for internal or personal use, or the internal or personal use of
specific clients, is granted by POWER ENGINEERING, ISSN 0032-5961,
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Prior to photocopying items for educational classroom use, please
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Power Engineering
1412PE_1 1

Steam Turbine Rehabs

Improve Heat Rates

The EPAs Clean Power Plan calls for a 6-percent improvement in heat rates, or fuel
efficiencies, at coal-fired power plants. Power Engineering examines how a steam
turbine upgrade can help meet this mandate.

CHAIRMAN Frank T. Lauinger

PRESIDENT/CEO Robert F. Biolchini
CHIEF FINANCIAL OFFICER/SENIOR
VICE PRESIDENT Mark C. Wilmoth

No.12, December 2014

VOLUME

40

Marylands Newest Casino Takes

a Creative Approach to Power

Learn about how a new CHP system installed at Baltimores Horseshoe Casino
uses captured heat from the engines jacket water and exhaust systems to
more than double energy efficiency.

45

Navigating the
Promises and Pitfalls of
Environmental Regulations

The U.S. power sector faces a host of new rules and regulations
governing air emissions, water intake structures, coal ash storage,
and discharge limits for effluent. The editors of Power Engineering
provide updates on where these and many other new rules for
power generators now stand.

DEPARTMENTS
2
4
8
10

Opinion
Industry News
Clearing the Air
Gas Generation

12
14
16
18

Industry Watch
View on Renewables
Energy Matters
Nuclear Reactions

POWER ENGINEERING ONLINE :

Newsletter:

Stay current on industry news,

events, features and more.

Newscast:

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Generating Buzz
Products and Literature
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www.power-eng.com

A concise, weekly update of all

the top power generation news

Industry News:
Global updates
throughout the day

12/15/14 11:54 AM

OPINION

Who Will Replace

the Industrys Aging
Work Force?
BY RUSSELL RAY, CHIEF EDITOR, POWER ENGINEERING MAGAZINE

very sector of the energy industry

is expected to lose a large share
of its work force as millions of
experienced professionals, baby boomers
born between 1946 and 1964, become
eligible for retirement over the next few
years.
By most accounts, the power sector
will need more than 100,000 new skilled
workers by 2018 to replace those retiring
workers. But attracting new talent has become an arduous undertaking as the industry faces a shortage of qualified workers and increased competition for college
graduates.
The Nuclear Energy Institute estimates
that 39 percent of the nuclear work force
will be eligible for retirement by 2018,
which means the industry must hire
20,000 new workers over the next four
years to replace them.
Is the power generation industry prepared to compete with other industries
for a new generation of skilled workers?
Whats more, does the industry have a
plan for training and knowledge sharing?
There are about 78 million baby boomers in the U.S. They represent 28 percent
of the U.S. population and 68 percent of
the existing work force.
About 40 percent of the work force at
Americas electric and natural gas utilities
will be eligible for retirement in the next
five years. About 20 percent are eligible
now. Whos going to replace them?
According to the Department of Labor,
as much as 50 percent of the nations utility workforce will retire in the next five to
10 years. The challenges associated with
replacing the technical and institutional
knowledge of these professionals will be
significant. Hard decisions must be made
soon to preserve intellectual property for
2

1412PE_2 2

the future.
To further illustrate the sense of urgency, here are some eye-opening statistics
compiled by the Center for Energy Workforce Development, a nonprofit consortium of electric utilities and associations:
Almost 62 percent of utility employees have the potential to retire or
leave over the next decade
Nine percent are ready to retire
now based on current assumptions
By 2015, 36 percent of employees in
positions that the industry deems as
critical may retire or leave for other
reasons
The good news is the industry is forming partnerships with universities and
other organizations that are designed to
tap the nations pool of talented younger
workers. The bad news is electric utilities
are losing workers at an increasing rate,
according to a report from PricewaterhouseCoopers.
The voluntary turnover rate at electric
utilities rose from 3.9 percent in 2010 to
4.9 percent in 2012. For high performers and tenured employees, the turnover
rate increased from 2.7 percent in 2010 to
3.7 percent in 2012. The 2013 report also
found that the turnover of utility employees during their first year was significantly higher, rising from 2.3 percent in 2011
to 5.5 percent in 2012.
This has created a turning point for
utilities precisely because they have had
so many decades of stability, the PwC
report found.
Other industries are better equipped
to retain employees, the report found.
Electric utilities should rethink their approach to employee retention as they
confront the increasing turnover of newer and high performers, as well as the

accelerating loss of experienced employees due to retirement.

PwC expects first-year turnover at utilities will continue to increase, and so will
the cost. If we assume, for example, that
for every 1,000 new employees, 100 or
so leave, at a cost of $2,300 to $3,600 per
hire, that translates into significant cost,
the report found.
The growing number of retirementeligible employees, rising turnover costs
and the generational shift in utility personnel are driving a loss of productivity
in the power sector, the report shows.
Some utilities are encouraging older
employees to delay retirement or to remain as contractors to mitigate the exodus of experienced personnel. But this
approach can lead to bigger problems
because it discourages innovation, the
report found. Older, more experienced
workers are less likely to push for change
because there is not enough incentive to
offset the risk to themselves. Why, for
example, would a worker whos been successfully doing things my way for 20-30
years change tack now, particularly if he
or she only has a few more years until
retirement or is back on the job as a contractor? the report asked.
Establishing a program for transferring knowledge is an essential element
for dealing with brain drain. Veteran
utility workers tend to pass valuable institutional knowledge orally, rather than
documenting and updating the information systematically. This intellectual capital is often lost when the worker retires
because there is no formal program to
capture their know-how.
If you have a question or comment,
contact me at russellr@pennwell.com

www.power-eng.com

12/15/14 11:53 AM

WESTINGHOUSE ELECTRIC COMPANY LLC

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12/15/14 11:53 AM

INDUSTRY NEWS
Day & Zimmermann
lands maintenance contract
at Palo Verde

remaining three units to get under way

every six months thereafter. The project
is scheduled for completion in February
2019.

B&W Canada to
provide nuclear services
for Bruce Power units
Day & Zimmermann Engineering,
Construction & Maintenance group has
been awarded a three-year contract by
Arizona Public Service Co. (APS) to provide maintenance services at the 3,739MW Palo Verde Nuclear Generation Stationnear Phoenix.
Construction is scheduled to begin in
January 2015.
The nations largest nuclear power is
operated by APS and jointly owned by
APS, Salt River Project, Southern California Edison, El Paso Electric, Public
Service Co. of New Mexico, Southern
California Public Power Authority and
the Los Angeles Department of Water
& Power.

MHPS to increase output

at power plant in Mexico
Mexicos Federal Electricity Commission (CFE) awarded Mitsubishi Hitachi
Power Systems, Ltd. (MHPS) a full turnkey order, worth $200 million, to increase the output of Units 1 through 4
at CFEs Ro Escondido Thermal Power
Plant from 1,200-MW to 1,320-MW. The
plant is in Coahuila, Mexico.
The order was received through Mitsubishi Hitachi Power Systems de Mexico, S.A. de C.V.(MHPS-MEX) and Elctrica de Ro Escondido S.A. de C.V.
MHPS will replace the original equipment, installed in 1982, with new steam
turbines and other core equipment, and
will be responsible for all aspects from
auxiliary equipment design, manufacture and procurement to civil engineering, installation and test operation.
Construction is expected to begin
in February 2017, with work on the
4

1412PE_4 4

The Babcock & Wilcox Company

(B&W) announced that its subsidiary
Babcock & Wilcox Canada Ltd. entered
into a long-term service agreement,
valued at nearly $300 million, with
Bruce Power.

Under terms of the contract, B&W

Canada will provide nuclear services
and components for Bruce Powers commercial nuclear operations in Tiverton,
Ontario. Additionally, B&W Canada will
supply outage services for steam generators and preheaters at all Bruce Power
units for the next six-year term.
The companys site in Tiverton, Ontario is home to eight CANDU reactors.
Were a proud, long-term supplier to
Bruce Power, dating back to 1977 when
we supplied the sites frst nuclear steam
generators, said President, B&W Canada,
John MacQuarrie.

Berkshire Hathaway
unit purchases AltaLink
Berkshire Hathaway Inc.s utility division completed its purchase of Canadian
power transmission provider AltaLink for
$2.7 billion.
The companies announced Monday
the deal was complete. Canadian regulators approved the deal last week.
AltaLink will keep its name and continue to run as a separate company under
Berkshire Hathaway Energy. Its headquarters will remain in Calgary.
Warren Buffetts Berkshire Hathaway

Energy owns and operates transmission

and distribution lines in the U.S. The
company also owns or contracts more
than 28,000 MW of generation.
Berkshire offcials say AltaLink ratepayers wont be charged higher rates because of the deal, and all of AltaLinks
earnings in the next three years will be
reinvested in the company.

EPA proposes
smog standards under
Clean Air Act
The U.S. Environmental Protection
Agency (EPA) proposed new smog, or
ozone, standards under the Clean Air Act
after recent scientifc evidence showed
harmful effects of ground-level smog.
Under the proposal, the EPA is seeking to strengthen air quality standards
between 65 to 70 parts per billion (ppb),
while taking comment on a level as low
as 60 ppb. The standards were last updated in 2008, setting them at 75 ppb.
Bringing ozone pollution standards
in line with the latest science will clean up
our air, improve access to crucial air quality information, and protect those most
at-risk. It empowers the American people
with updated air quality information to
protect our loved ones - because whether
we work or play outdoors we deserve to
know the air we breathe is safe, said EPA
Administrator Gina McCarthy.
More than 1,000 ozone standard studies were reviewed by EPA scientists. The
studies indicate that exposure to the
ozone at the current standard, below 75
ppb, can pose a signifcant threat to public health.

MISO concerned about

Clean Power Plan
In light of a declining power reserve
margin because of existing Environmental Protection Agency (EPA) rules, the
Midcontinent Independent System Operator (MISO) has signifcant reliability
concerns about EPAs proposal to cut carbon dioxide emissions by 30 percent.
www.power-eng.com

12/15/14 11:52 AM

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1412PE_5 5

12/15/14 11:52 AM

MISO fled its comments with EPA

Nov. 25, just days ahead of the Dec. 1
deadline for comments. In June EPA
rolled out its plan to have states cut
CO2 emissions from the power sector
30% by 2030.
MISO has identifed electric system reliability concerns related to the proposed
rules 2020-2029 interim performance
requirements, MISO President and CEO
John R. Bear said in a statement.
The MISO region faces declining
power reserve margins due to EPAs Mercury and Air Toxics Standards [MATS]
and other factors, Bear said. The Clean
Power Plan will drive further changes to
the energy resources used across our footprint. Building new generation, natural
gas infrastructure and transmission facilities necessary to support electric system reliability will take more time than
the interim performance period allows.
MISO research indicates that between
10 GW and 12 GW of coal-fred generation will retire by 2016 to meet MATS
requirements. The interim requirements
in the EPA CO2 proposal indicates that
up to 25 percent of the remaining coal
capacity in MISO - which equates to 14
GW - could potentially retire in order to
comply with the proposed rule.

High court to review

EPA mercury limits
The U.S. Supreme Court is stepping
into a new case about Obama administration environmental rules, agreeing to
review a ruling that upholds emission
standards for mercury and other hazardous air pollutants from coal- and oil-fred
power plants.
The justices on said they would hear arguments from industry groups and states
that are challenging Environmental Protection Agency rules designed to clean
up chromium, arsenic, acid gases, nickel,
cadmium as well as mercury and other
dangerous toxins.
The federal appeals court in Washington, D.C., upheld the rules in April.
One judge on the appeals court
6

1412PE_6 6

complained then that the EPA didnt consider costs in deciding whether regulation
of hazardous air pollutants from power
plants is appropriate.
The problem here is that EPA did not
even consider the costs, wrote Judge
Brett Kavanaugh of the U.S. Circuit Court
of Appeals for the District of Columbia.
And the costs are huge, about $9.6 billion a year - thats billion with a b - by
EPAs own calculation.

Dresser-Rand shareholders
approve merger agreement
with Siemens
Dresser-Rand Group Inc. stockholders
approved its merger agreement with Siemens Energy. At a stockholders meeting,
98.9 percent were in favor of the agreement.
In September, Dresser-Rand signed a
defnitive merger agreement in which
Siemens would acquire all outstanding
shares of Dresser-Rand common stock
for $7.6 billion.
Siemens plans to operate Dresser-Rand
as its oil and gas business and retain the
Dresser-Rand brand name and its executive leadership team.
Dresser-Rand is a global supplier of rotating equipment and aftermarket parts
and services.
The deal is expected to close in summer 2015 and is subject to regulatory approval in the U.S., Europe and other jurisdictions and other customary closing
conditions.

Montana-Dakota Utilities to
acquire wind farm
Montana-Dakota Utilities Co., a division of MDU Resources Group signed an
agreement to purchase a 107.5-MW wind
farm being developed by ALLETE Clean
Energy, a subsidiary of ALLETE, Inc.
The North Dakota Thunder Spirit
Wind Project will feature 43 turbines.
Our customer energy requirements
are expected to grow at fve percent
per year for the next fve years, said
Frank Morehouse, president and CEO

of Montana-Dakota. Not only does

this project provide needed generation, but it also further diversifes our
generation portfolio, boosting our
renewable segment to 20 percent.
The projects cost is approximately $200
million and the purchase is subject to
regulatory approval.

Report: EPAs Clean Power

Plan will raise prices
The cost of electricity and natural gas
will increase by nearly $300 billion in
2020 compared to 2012 prices, according
to the Energy Market Impacts of Recent
Federal Regulations on the Electric Power
Sector, report conducted by Energy Ventures Analysis Inc.
The report states the U.S. Environmental Protection Agencys (EPA) Clean
Power Planwill force annual residential
electricity and natural gas costs to rise
by $680, or 35 percent, from 2012 compared to 2020, increasing every year.
States that have implemented deregulation of wholesale electric power markets,
where the price of electricity will rise to
the marginal cost to support new generating capacity, will be the most affected.
The study predicts electricity costs will
increase by $177 billion and natural gas
will see an increase of $107 billion in
2020 compared with 2012. The industrial
sector will be signifcantly impacted with
costs approaching $200 billion in 2020.
Existing coal-fueled generating facilities are already operating at very effcient
levels and, collectively, will not be able
to achieve an additional six percent heat
rate improvement, said Seth Schwartz,
Energy Ventures Analysis, Inc. President.
The company concluded that U.S.
power markets will see a shift from coal
to natural gas, causing upward pressure
on natural gas demand and prices.
www.power-eng.com

12/15/14 11:52 AM

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12/15/14 11:52 AM

CLEARING THE AIR

We Can See Light

at the End of the
Regulatory Tunnel
BY MITCHELL KRASNOPOLER, MANAGER OF AIR QUALITY, KIEWIT POWER ENGINEERS

n 2011, the timeline chart of expected environmental regulations for

the U.S. utility industry was extensive and complex. The complexity of the
timeline caused many in the industry to
refer to the time line as the Train Wreck
diagram. That diagram showed the upcoming air, water, and waste regulations
from 2008 until about 2014. So where
are we on the diagram now that 2014 is
here? Some recent rulings have reduced
the unknowns and a path to compliance
can be strategized.
The diagram included seven major
regulations:
1. Transport Rule / Clean Air Interstate
Rule (CAIR) / Cross State Air Pollution Rules (CSAPR)
2. Clean Air Mercury Rule (CAMR) /
Mercury and Air Toxics Standards
(MATS)
3. National Ambient Air Quality Standards (NAAQS) for ozone, SO2,
PM2.5
4. Greenhouse Gas Regulations / Carbon Pollution Standards / Clean
Power Plan
5. Cooling Water Intake Regulation
(316b)
6. Electric Generation Effluent Limitation Guidelines (ELG)
7. Coal Combustion Residuals / Residues (CCR)
In October 2014, the U.S. Court of Appeals for the District of Columbia Circuit
lifted the stay on CSAPR from December
30, 2011. In addition, last month the
EPA sent the final CCR rule to the White
House for Office of Management and
Budget review. These two recent actions
and others address most of the seven
8

1412PE_8 8

regulations listed above.

Several of the identified regulations
were challenged in court, vacated, remanded, reinstituted, revised, reissued,
or have a court-imposed deadline for the
proposed or final rule. As of November
2014, the following final rules have been
issued: MATS (Feb. 16, 2012), CSAPR
(final issued Aug. 8, 2011; final revisions
issued Feb. 21, 2012; upheld by Supreme
Court on April 29, 2014; stay lifted Oct.
23, 2014), and 316b (Aug. 15, 2014),
These rules have court-imposed deadlines or other target dates: Ozone NAAQS
(proposal expected by Dec. 1, 2014; final
expected by Oct. 1, 2015), Clean Power
Plan (proposed on June 2, 2014; final expected by June 2015), ELG (proposed on
June 7, 2013; final expected by Sept. 30,
2015), CCR (proposed final rule sent by
EPA and received by White House on Oct.
27, 2014, final is expected to be issued by
Dec. 19, 2014).
Although the CSAPR stay was lifted,
the lawsuit to resolve specific provisions
of the rule, such as revising the original
CSAPR deadlines, will continue. EPA had
requested a three-year compliance delay,
but the stay ignored this. Despite the uncertainty, there are few additional reductions expected for CSAPR compliance
because the requirements for MATS are
well underway.
The January 2014 CCR consent decree
requires the EPA to publish the final CCR
rule by December 19, 2014. The final rule
has been received by the White House
and is under review by the OMB. The
abstract on OMBs Regulatory-Review
website lists the two options from the
June 21, 2010 proposed rule: 1) regulate

CCRs as special wastes under subtitle C

of RCRA; 2) regulate CCRs as non-hazardous waste under subtitle D of RCRA.
Many believe that that the EPA final rule
now under review will classify CCRs as
special wastes, a much more stringent
standard. Industry had expected the subtitle D option to be put forward. The pursuit of special waste characterization
may reflect a growing confidence within
the EPA that rigorous and demanding
rules will be upheld.
Under the special waste option, existing surface impoundments will be
phased out. This will require plants with
wet fly ash, wet bottom ash, or wet flue
gas desulfurization (FGD) waste (e.g.,
gypsum) to convert their plant systems
to produce a dry byproduct that could be
landfilled.
Of the seven major regulations noted
above, all are expected to be final by Oct.
1, 2015. CSAPR, MATS, 316b, and CCR
should have final rules and the others
will have a proposed rule by the end of
2014. Many of these rules have demanding compliance provisions that will require costly capital expenditures. Despite
these complex and challenging regulations, there is at least growing clarity for
the utility industry regarding the rules
under which it will be expected to operate. Compliance strategies will no doubt
continue to evolve. As has clearly been
demonstrated over the last several years,
the low cost of natural gas significantly
influences these compliance decisions.
There seems to be light at the end of the
regulatory tunnel and the industrys ingenuity, flexibility and forward planning
may help avoid a real train wreck.
www.power-eng.com

12/15/14 11:52 AM

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12/15/14 11:52 AM

GAS GENERATION

Plant Efficiency Still

Rules, No Matter Which
Way the Political/
Economic Winds Blow
BY ROB BROGLIO, SENIOR BUSINESS DEVELOPMENT MANAGER, NAES CORPORATION

he increasing abundance of
natural gas produced by alternative shale exploration and
drilling has lowered gas prices dramatically over the last few years, resulting in
a shift toward gas as a power-generating
fuel. However, coal still claims the lions
share of the power-generation mix and
is projected to do so for 20 years out, as
it still represents a significant portion of
the installed generating base.
Inexpensive gas has prompted many
utilities to change their traditional game
plan of coal-as-baseload fuel and gas as
fuel on the margin. Gas has traditionally been used for intermediate or peaking power, but many now argue that gas
could readily displace much of the existing baseload of fully dispatchable coal
power required to balance power grids
demand response on a 24/7 basis and
ensure their continuous reliability.
But there are those who urge caution
about jumping on the gas bandwagon.
They remember a not-too-distant time
when it looked as if gas was growing
scarcer, which prompted prices to spike
and utilities to start building coal-fired
capacity again. Today, the gas-coal debate has polarized along political lines,
as witnessed by the 2012 effort to pass
the Stop the War on Coal Act in Congress.
The export market has several major
variables. Gas producers want to export more of their product to Asia and
Europe, which would likely drive up
domestic prices. Coal producers, meanwhile, want to export their product to
10

1412PE_10 10

the same markets, now that domestic

demand is ebbing in favor of natural
gas. Here again, future fuel price trends
rest at least in part on government policy decisions.
At the same time, air- and waterquality standards continue to tighten,
making it harder for coal-fired plants
to turn a profit. Owners and investors
spend money and influence, hoping to
sway the political winds in their favor.
But whatever happens in the elections
of 2014 and 2016, the EPA is not going
away, and compliance will still cost less
than a corrective action.
Natural gas has, understandably,
been promoted as the environmentally
friendlier fossil fuel. Gas combustion
emits half the CO2 and NOx of coal, and
negligible SO2 or mercury. Besides that,
combined-cycle technology has boosted efficiency dramatically, making gas
that much more competitive.
But coal will not flame out overnight
in spite of a nine-year low in gas prices
that will continue to change the coalgas dispatch equation. There are pros
for continuing to burn coal that balance
out its well-publicized cons. Hydraulic
fracturing poses environmental risks
that are tough to quantify accurately.
There are also safety issues with fracking that stack up against coal-minings
long history of mishaps.
Nor will utilities be decommissioning a half-billion-dollar coal plant that
meets EPA requirements to construct a
new natural gas plant, simply because

gas costs less this year. While some authorities have sounded the death knell
for coal as a power fuel source, others
have predicted that no more than 20
percent of coal-fired power capacity will
shift to gas within the next 20 years,
which would still leave coal with 25 to
30 percent of the capacity.
There are numerous variables in play
that affect the price and desirability of
power-generating fuels, and most of
them are difficult to control. While its
prudent to keep an eye on how things
are trending in the markets and political arenas, the best strategy is for plants
to diversify fuels, ensuring that each
of their units is profitable, no matter
which way the winds blow.
Whether plants burn gas or coal or a
combination of the two, they still have
control over unit efficiency, reliability, and dependability. Whichever way
prices and politics evolve over the next
decade, fuel will still account for 50 to
70 percent of a plants annual operating
budget, capital expenditures for 15 to
20 percent of that budget, and O&M for
10 to 15 percent. That basic formula is
not likely to change.
Increasing unit efficiency and
reducing fuel consumption and
emissions makes everybody happy.
At the end of the day, even small,
incremental upticks in performance
will dramatically improve annual
revenues and earnings especially as
new EPA requirements for heat rate
and emissions come on line.
www.power-eng.com

12/15/14 11:51 AM

Solving the Gas Turbine Back-up

Liquid Fuel System Reliability Issue
Addressing system inadequacies is a fundamental part of
improving the overall reliability of the liquid fuel system
and its related components. High system and
environmental temperatures naturally create a situation
ideal for coke formation. Operationally compromised
control system components are responsible for the
inability to start on liquid fuel or transfer from gas to
liquid fuel.
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performed JASC fuel system upgrades reveal that after

www.jasc-controls.com
Tel: +1 602.438.4400 Fax: +1 602.438.4420
sales@jasc-controls.com

Advertorial
1412PE_11 11

For info. http://powereng.hotims.com RS#6

12/15/14 11:51 AM

INDUSTRY WATCH

We Can Do Better:
The Unintended
Consequences of EPAs
Clean Power Plan
BY STEVE CORNELI, SENIOR VICE PRESIDENT FOR POLICY AND STRATEGY, NRG ENERGY

ost people agree that it is

time to seriously reduce
global emissions of greenhouse gases (GHG). EPA is actually
required by law to reduce power and
industrial GHG emissions in the U.S.,
and they certainly deserve an E for
effort so far. But effort without good
outcomes doesnt really count. Sadly,
the EPAs rule as proposed would create unintended consequences that will
prevent essential long-term carbon reductions in the U.S. power sector.
Heres why: the rules main approach to reducing emissions is not
renewables, not energy effciency, not
even carbon capture or nuclear, but
switching practically overnight from
coal to natural gas-fred electricity.
This is like a binge diet to lose weight
in two weeks (a really bad idea) by And what about renewables, the vegetaswitching from donuts to bagels (an ble of a balanced diet? Once our power
even worse one).
markets are saturated with new natural
We all know binge diets avoid the bal- gas plants, there will be no room left for
anced nutrition and long term program new, zero carbon power, no matter how
needed for healthy, sustained weight cheap it becomes. When youre full of
loss. In the same manbagels, who has room
ner, the EPAs sudden Just like bagels
for vegetables?
shut down of coal are a high carb
NRG sees renewplants will put reliables, carbon capreplacement for
ability and affordable
ture, and innovative
power at risk, leaving donuts, natural gas distributed energy
massive amounts of is a high carbon
technologies as the
new gas-fred power
foundation of a clean
replacement for
as the only answer to
energy economy that
keep the lights on and coal.
can thrive without
electric bills tolerable.
risking catastrophic climate change.
And just like bagels are a really high Weve already begun our own carbon
carb replacement for donuts, natural gas reduction regime by building one of
is a high carbon replacement for coal. the largest renewable energy feets in
12

1412PE_12 12

the country. And we believe that the

U.S. will beneft from rapid clean energy growth, helping stave off the worst
of climate change, while demonstrating the commercial success of clean
technologies.
We are concerned that the EPAs rule,
as proposed, is poised to create a new
dash to gas, locking in decades of yet
another carbon-dense fossil fuel, while
locking out the increasingly economical
clean energy sources the world needs.
The good news is that simple revisions to EPAs rule can easily be addressed to result in greater overall
emissions reductions at a lower cost.
To see how, we encourage you to read
NRGs recommendations to the EPA
in our Glide Paths Instead of Cliffs
white paper.
www.power-eng.com

12/15/14 11:51 AM

Microgrid Momentum
Raises Legal and
Regulatory Uncertainty

Ram Sunkara

Michael Stosser Jackson Allen

BY RAM SUNKARA, MICHAEL STOSSER AND JACKSON ALLEN, SUTHERLAND ASBILL & BRENNAN LLP

Authors:
Ram Sunkara is a
partner in Sutherland
Asbill & Brennans
Houston offce. He
chairs the frms
Distributed Generation
and Combined Heat
and Power (DG/CHP)
Practice and counsels
utilities and corporate
energy consumers.
Michael Stosser
advises on the
development and
fnancing of energy
storage systems and
on federal and state
regulation of electric
systems.
Jackson Allen is
an associate in
Sutherland Asbill &
Brennans Atlanta
offce and has
experience counseling
clients on the
development of DG/
CHP facilities.

evere weather, power outages

and other grid disruptions have
paved the way for the development of microgrid systems. Grid reliability is of paramount importance,
and microgrids are a key component of
the equation. Because they can operate independently from the grid, microgrids offer an attractive alternative
for energy users that require uninterrupted and reliable energy in order to
operate, such as military bases, hospitals, universities, and commercial and
industrial end-users.

MICROGRID DEFINITION
AND TECHNOLOGY VARIETY
A microgrid is a group of interconnected loads and distributed energy
resources that act as a single entity that
can connect and disconnect from the
grid, and thus operate either with the
grid or in an island mode.
Because a microgrid project can incorporate a variety of technologies, it
has the potential to provide less costly
and more reliable power than the grid.
Microgrid generation resources can
include conventional natural gas-fred
generation, combined heat and power
generation, and other energy sources.
Microgrid installations also can include the integration of renewable energy generation resources.

ENERGY STORAGE
Energy storage can be used with renewable resources, such as wind and
solar systems, to reduce the effects of
interruption of generation. It also can
provide a source of back-up power.
Energy storage is a critical aspect of a
www.power-eng.com

1412PE_13 13

microgrid system and provides many

benefts, including power quality, frequency and voltage regulation. Several
energy storage technologies are used in
microgrid systems, and it is this wide
variety of technologies that gives developers the fexibility to design and customize microgrids to refect the needs
of the energy end-user.

LEGAL AND REGULATORY

UNCERTAINTY
Although microgrids are viable options, legal issues and regulatory uncertainty surround their development.
Most jurisdictions have not yet developed a clear regulatory framework for
microgrid applications, and developers must navigate a complex maze of
legal and technical issues to develop
and implement a microgrid system.
Because the regulatory landscape remains somewhat uncertain, it is imperative that developers understand
the issues relating to the jurisdiction
of a proposed microgrid project. These
issues relate to whether the state has
jurisdiction over the microgrid system,
whether the microgrid is a generation
or a transmission asset, whether it is
self-contained, and whether it returns
power to the grid. Other issues relate
to safety, zoning, the environment,
interconnection to the electric grid,
coordination with the utility and the
applicable independent system operator, and the requirements of the North
American Electric Reliability Corp.

OWNERSHIP ISSUES
Ownership issues also must be considered when developing a microgrid

project. There are a myriad of different

ownership models, and each model
presents its own set of legal and commercial issues. If a microgrid has multiple investors or developers, such as a
community-based microgrid system,
there may be issues of ownership regarding physical, storage and generation assets, and distribution and transmission lines. Other ownership issues
relate to the rights to, and profts from,
the sale and transfer of the energy,
steam and heat produced by the microgrid system.

MICROGRID FINANCING
Additional legal and commercial issues may arise relating to fnancing a
microgrid project. For example, project fnancing will require a developer
to secure a revenue stream through an
agreement with an end-user. Such an
agreement with a single end-user may
not present a challenge. But community-based systems for a large number
of end-users will be more complex,
especially if those projects are funded
through municipal bonds and other
types of government funding.

CONCLUSION
Grid reliability has become a concern in the wake of storms and natural
disasters. Microgrids provide reliable
energy, especially in times of emergency or grid service interruption. It is
imperative for project developers, utilities and customer-owners to carefully
consider all of the issues and possible
hurdles that a microgrid project will
encounter and be prepared to address
those issues appropriately.
13

12/15/14 11:51 AM

VIEW ON RENEWABLES

Solar Generation and

Storage Gives Utility
Services a Run for
Their Money
BY BILL RADVAK, CEO, AMERICAN VANADIUM

t the Asia Pacific Clean Energy

Summit & Expo in Honolulu
this September, it was clear that
Hawaii is on the fast-track to adopting energy storage solutions.
Sunny Hawaii suffers from a solar power glut, with an over-abundance of solar
power. With electricity rates that run at
least twice the national average and solar
reaching equivalence with other energy
costs, the stage is set to welcome energy
storage innovations to the aloha state.
With solar and battery technologies
working together, in Hawaii and in other
states, what may be left by the wayside
are the traditional utility companies and
their regulators that have been slow to
adapt to rapidly changing technologies.
Equipped with a solar-plus-battery system, customers can take or leave traditional utility service with what amounts
to a utility in a box, reports the Rocky
Mountain Institute. This utility in a
box represents a fundamentally different challenge for utilities. Whereas other
technologies, including solar PV and other distributed resources without storage,
net metering, and energy efficiency still
require some degree of grid dependence,
solar-plus-batteries enable customers to
cut the cord to their utility entirely.
Solar combined with energy storage
systems are cost effective, commercially
available today and operate fully independent on the grid. Forward thinking
utilities look at energy storage solutions
as an opportunity to add bottom line
value to the grid.
Energy storage plays a vital role in helping America secure a clean and affordable future powered predominately by
14

1412PE_14 14

distributed renewables. The solar industry has installed about four times as much
solar at about one-third of its cost four
years ago. As solar costs have dropped,
so have the costs of storage technologies
such as lithium and vanadium.
As reported by BBC News magazine,
vanadium is a metal that may soon be
powering your neighborhood. Vanadium, a critical element, is growing in
importance as an alloying metal used to
strengthen steel, as well as in emerging
uses with mass storage cells for renewable
energy and lithium-vanadium batteries
for electric vehicles.
Leading the way in new grid scale renewable energy storage solutions are
vanadium flow batteries. These batteries allow inherently intermittent energy
supplies to be regulated from moment to
moment. The electricity industry refers to
such energy as dispatchable energy or
dispatchable power, which enables the
grid to balance the amount of energy being put into the wires with the demand
arising from consumers. These mass
energy storage solutions are designed to
help America deliver on its objectives for
clean energy, energy independence and
self-sufficiency, as well as targets for the
reduction of CO2 and greenhouse gases.
Vanadium flow systems utilize vanadiums unique characteristics for rechargeable energy storage, which is critical to
renewable and dispatchable power systems. Research facilities around the world
are investing in vanadium flow battery
research and development to meet the
projected global demand. The vanadium
flow system has virtually unlimited storage capacity with the ability to scale the

batteries. As a result, the vanadium flow

batterys value to the emerging renewable
energy technology sector is compelling
for many utilities and grid operators.
Efficient and economic energy storage
technologies have been cited as the Holy
Grail in unlocking the huge potential of
renewable energies and the commercial
development of microgrid technologies.
Everyone is looking to energy storage as
a complete or partial solution to a vast
number of issues: renewable integration,
cold storage, frequency regulation, spinning reserve, micro-grid, UPS, peak shaving, and many more.
On the macro level, it isnt quite the
Holy Grail. Largely, that is an honest
overstatement borne out of the surprisingly sudden and mass realization that
energy storage has irreplaceable value in
the energy value chain.
On the micro level, energy storage
clearly is the Holy Grail. As my company
is introducing our energy storage solution
to America, we are following the timetested sales strategy of identifying initial
customers -- i.e., find those with the most
pain. It is the Holy Grail for those in the
renewable energy generation side, where
for years the goal was simply to build as
much PV and wind turbines as possible
with little to no regard the variable nature
of wind and solar.
Americas smart big money investors
finally see green in the green energy sector and are putting their money where
their mouth is. With the clean tech revolution comes the birth and development
of hundreds of new companies with the
products, services and materials necessary to fuel this insurrection.
www.power-eng.com

12/15/14 11:56 AM

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1412PE_15 15

12/15/14 11:56 AM

ENERGY MATTERS

Reflection
and Projection
BY ROBYNN ANDRACSEK, P.E., BURNS & MCDONNELL AND CONTRIBUTING EDITOR

s environmental oversight
changes, so does the power
production industry. 2014 saw
resolution of several existing issues as
well as initiation of new rules which
will continue into 2015. Regardless of
the outcome of the 2014 midterm elections, politics are unlikely to cause an
abrupt change in policy; there is too
much inertia in regulatory actions.
Obviously, the carbon pollution
standards dominate the forecasts and
worries of our industry. This trio of
regulations covers new, modifed and
existing power plants. The Clean Power
Plan (for existing power plants) poses
the most diffculties, as evidenced by
EPAs October 2014 request for even
more comments on the proposed rule.
EPA has incentive to write the most
robust rule possible; the legal troubles
of CAIR/CSAPR (Clean Air Interstate
Rule/Cross-State Air Pollution Rule)
and CAMR/MATS (Clean Air Mercury
Rule/Mercury and Air Toxics Standards)
are not diffculties the EPA is anxious to
repeat.
In the absence of a clear national energy policy, should EPAs Clean Power
Plan be the next best thing? The Clean
Power Plan is mandating that the industry move toward more natural gas
usage - a direction in which industry
was already going. However, instead of
continuing to let economic forces act,
EPA is codifying and accelerating the
shift. The Clean Power Plan dominated
the discussion in 2014 and will continue to do so in 2015. However, there are
many other issues that the power industry should not forget.
16

1412PE_16 16

CSAPR is back, but will have a minimal short-term industry impact. Many
plants can simply turn on their idled
or underutilized selective catalytic
reduction (SCR) systems and achieve
their target NOx reductions. However,
CSAPR was based on an annual PM 2.5
standard of 15 micrograms per cubic
meter (g/m3) and an 8-hour ozone
standard of 80 parts per billion (ppb).
In the long term, what will happen
to the CSAPR goals when the current
PM 2.5 standard of 12 g/m3 is incorporated? Additionally, it is likely that
the ozone standard will be lowered
during 2015 to 70 ppb, leading to a
3-fold increase in the number of nonattainment counties. CSAPRs goals
three to fve years from now will be
much more diffcult to meet than the
current goals.
The coal combustion residuals
(CCR) rule has been sent to the White
House Offce of Management and Budget (OMB) for regulatory review. Fly
ash, scrubber byproducts and bottom
ash will either be regulated as a solid
waste or as a hazardous waste, but either way, industry faces a billion dollar plus impact. Under both options,
EPA asserts that the benefcial reuse
of CCR, such as in concrete, will not
be regulated. However, industry is less
certain that reuse will not be economically prohibited or that so much legal
risk will be created that benefcial reuse will be impractical. Due to a courtmandated deadline, expect a fnal rule
to be published in the Federal Register
before the end of December 2014.
Finally, keep your eyes on the

controversy over emissions during

startup, shutdown and malfunction.
EPA originally proposed allowing affrmative defense, i.e. excess emissions
occurred but they were unavoidable
so penalties should be reduced. In response to suits by the Sierra Club, the
Courts ruled that affrmative defense
provisions cannot be applicable to violations of Clean Air Act requirements.
Will work practices such as starting up
under clean fuel (e.g. natural gas) suffce, or will industry be forced to monitor emissions under transient, untestable conditions? How will the inability
of some control devices to operate under startup/shutdown temperatures
and pressures be transformed into
compliant operating procedures? Under terms of a settlement agreement
with the Sierra Club and WildEarth
Guardians, the signature date for the
fnal notice is May 22, 2015.
Further on the horizon are the implications of EPAs increased regulation of oil and gas extraction, the
Sierra Clubs enthusiasm for energy
storage for all those renewables out
there versus base-load generation, and
the law of diminishing environmental
returns seen in some recent (and outrageous) proposed rules (31 tons PM per
year controlled nationwide from grain
elevators at a cost of $2,000,000, or
over 64,500/ton!)
As we struggle as an industry to
comment, understand, and react to the
proposed Clean Power Plan, we cannot
allow other regulatory forces to blindside us. 2015 promises to again be a
wild ride.
www.power-eng.com

12/15/14 11:50 AM

EXTRACTIVE ANALYZER SYSTEMS FOR VARIOUS PROCESS AND EMISSIONS COMPONENTS

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1412PE_17 17

12/15/14 11:50 AM

NUCLEAR REACTIONS

Vote of Confidence
BY MARY JO ROGERS, PH.D., STRATEGIC TALENT SOLUTIONS

n August Energy Secretary Ernest

Moniz made an important visit
to the Waste Isolation Pilot Plant
outside Carlsbad, New Mexico. WIPPs
operations had been put on hold since
February of this year following the occurrence of two significant, yet unrelated events that rocked the site and community. On February 5, a 29 year-old
salt haul truck caught fire in the underground mine. All 86 people in the mine
at the time evacuated safely although
six people were treated for smoke inhalation. Then on the evening of February
14 there was a radiation leak detected
by a continuous air monitor, which was
later determined to be caused by a drum
that had ruptured in the underground
disposal area. Although the causal
analyses are still ongoing, initial reports
show that the drum had been shipped
from Los Alamos National Laboratory,
where changes were made in the packing of nuclear waste (the now infamous
organic kitty litter issue).
The WIPP site and the Department of
Energys Carlsbad Field Office have been
working tirelessly on a recovery plan following extensive reviews by the Accident
Investigation Board and others. During
his visit, Secretary Moniz did not mince
words, calling WIPP an absolutely core
facility for the country that must come
all the way back. At the end of September, DOE headquarters released the official recovery plan that puts limited site
operations starting early in 2016 and full
operations in 2017.
People outside the countrys nuclear
weapons complex may not appreciate the
implications of the Secretarys visit. In
the context of other recent events in the
world of nuclear weapons, the WIPP recovery takes on even greater importance.
18

1412PE_18 18

FOLLOW THE MONEY

In Kansas City, Missouri a $687 million National Security Campus was officially dedicated on August 22. It was built
to replace the nearby Bannister Federal
Complex, which had been building nonnuclear components for the U.S. nuclear
stockpile since 1992 (the plant had other
duties 1949-1992). The new center amply
illustrates the administrations commitment to modernizing the nations nuclear weapons complex, whose aging plants
and facilities have become very run down
over the decades. The nuclear re-investment extends well beyond Kansas City,
to seven other major nuclear weapons
complex sites in New Mexico, Texas, California, Nevada, Tennessee, and South
Carolina, which are in the midst of upgrades or are anticipating improvements.
As part of the National Nuclear Security
Administration, the mission of these sites
is to support the nuclear weapons stockpile stewardship and management program. Some published estimates of the
money to be spent on U.S. nuclear weapons modernization equal as much as $1
trillion.

BACK TO WIPP
For the past 15 years WIPP has been
safely depositing transuranic or TRU
waste from multiple waste generator sites,
which include a number of the National
Nuclear Security Administration facilities. WIPPs disposal of TRU waste is a
key part of the nuclear modernization,
stewardship, and disarmament equation.
The clean-up of legacy material thus far
has resulted in over 90,000 cubic meters
of radioactive waste disposal in the panels and rooms of the WIPP salt repository 2,150 feet underground. WIPP is the
only geologic repository for nuclear waste

in the U.S. since the administration defunded the embattled Yucca Mountain
project.
The salt deposits found in the Permian
Basin, which stretches over west Texas
and the southeastern portion of New
Mexico where WIPP is located, have been
identified as scientifically ideal for deep
geologic disposal of long-lived radioactive waste due to its stable geology, lack of
water, and plastic quality that makes the
salt entomb, or close in on the waste over
time. Salt formations constantly move
under pressure so employees must work
to maintain disposal room and tunnel
openings in the WIPP underground.

MEANWHILE, IN
WASHINGTON D.C.
While the nations nuclear waste legacy goals make WIPPs recovery critical,
prior to the shutdown there were broader
missions being whispered. For instance,
in August of 2013 PBSs NOVA program
published an optimistic story about
WIPPsuggesting that WIPP may be
geologic repository for used commercial
nuclear fuel since the Yucca Mountain
site was dumped. No such similar stories
have appeared since February.
Moreover, the ultimate question of
what to do with used commercial nuclear
fuel has been tabled for now. The Nuclear
Regulatory Commission issued a proposed ruling that spent nuclear fuel can
be safely stored in spent fuel pools in the
short-term and in dry casks on-site in the
long-term. The pressure of finding an alternate geologic repository may be off.
Pressure or no pressure, you have to
hand it to the 1,000 or so employees at
the WIPP site for their quick response,
safe evacuation, and already approved recovery plan.
www.power-eng.com

12/15/14 11:50 AM

For info. http://powereng.hotims.com RS#9

1412PE_19 19

12/15/14 11:50 AM

GENERATING BUZZ

EPAs Clean Power Plan

he U.S. Environmental Protection Agencys Clean Power

Plan, proposed in June, would
require existing power plants to reduce
carbon dioxide (CO2) emissions 30
percent below 2005 levels by 2030. Although the national average would be
30 percent below 2005 levels by 2030,
the specifc reduction target for each
state varies.

The CO2 reduction targets for each

state are based on that states energy
mix. Because each state has a unique
energy mix, the various reduction
techniques achieve different savings in
each state and thus signifcantly different targets.
Under the proposed rule, the benchmark year would be 2012, which
means any improvements completed at

coal-fred power plants during that year

or before would not be recognized.
EPA is expected to issue a fnal rule by
June 2015. States would have until June
2016 to fle their compliance plans, with
one- and- two-year extensions available
to qualifying states.
The following table shows the proposed state reduction targets (lbs/MWh)
compared with historic emissions rates.

State CO2 reduction targets under the proposed Clean Power Plan
2012
Emission
Rate (lbs/
MWh)

Interim
Goal (lbs/
MWh)

2012
Emission
Rate (lbs/
MWh)

Interim
Goal (lbs/
MWh)

Interim
Reduction
Target

Alabama

1,444

1,147

-21%

1,059

-27%

Montana

2,245

1,882

-16%

1,771

-21%

Alaska

1,351

1,097

-19%

1,003

-26%

Nebraska

2,009

1,596

-21%

1,479

-26%

Arizona

1,453

735

-49%

702

-52%

Nevada

988

697

-29%

647

-34%

Arkansas

1,640

968

-41%

910

-45%

N. Hampshire

905

546

-40%

486

-46%

California

698

556

-20%

537

-23%

Colorado

New Jersey

932

647

-31%

531

-43%

1,714

1,159

-32%

1,108

-35%

New Mexico

1,586

1,107

-30%

1,048

-34%

765

597

-22%

540

-29%

New York

983

635

-35%

549

-44%

Delaware

1,234

913

-26%

841

-32%

North Carolina

1,646

1,077

-35%

992

-40%

Florida

1,200

794

-34%

740

-38%

North Dakota

1,994

1,817

-9%

1,783

-11%

Georgia

1,500

891

-41%

834

-44%

Ohio

1,850

1,452

-22%

1,338

-28%

Hawaii

1,540

1,378

-11%

1,306

1,306

Oklahoma

1,387

931

-33%

895

-35%

Idaho

339

244

-28%

228

-15%

717

407

-43%

372

-48%

Illinois

1,895

1,366

-28%

1,271

-33%
Pennsylvania

1,540

1,179

-23%

1,052

-32%

Indiana

1,923

1,607

-16%

1,531

-20%
Rhode Island

907

822

-9%

782

-14%

Iowa

1,552

1,341

-14%

1,301

-16%

Kansas

1,940

1,578

-19%

1,499

-23%

South Carolina

1,587

840

-47%

772

-51%

Kentucky

2,158

1,844

-15%

1,763

-18%

South Dakota

1,135

800

-29%

741

-35%

Louisiana

1,466

948

-35%

883

-40%

Tennessee

1,903

1,254

-34%

1,163

-39%

437

393

-10%

378

-14%

Texas

1,298

853

-34%

791

-39%

1,870

1,347

-28%

1,187

-37%

Utah

1,813

1,378

-24%

1,322

-27%

925

655

-29%

576

-38%

Virginia

1,297

884

-32%

810

-38%

Michigan

1,696

1,227

-28%

1,161

-32%

Washington

763

264

-65%

215

-72%

Minnesota

1,470

911

-38%

873

-41%

West Virginia

2,019

1,748

-13%

1,620

-20%

Mississippi

1,130

732

-35%

692

-39%

Wisconsin

1,827

1,281

-30%

1,203

-34%

Missouri

1,963

1,621

-17%

1,544

-21%

Wyoming

2,115

1,808

-15%

1,714

-19%

State

Connecticut

Maine
Maryland
Massachusetts

Interim
Reduction
Target

2030 State 2030

Goal (lbs/
Reduction
MWh)
Target

State

Oregon

2030 State 2030

Goal (lbs/ Reduction
MWh)
Target

Source: EPA
20

1412PE_20 20

www.power-eng.com

12/15/14 11:50 AM

Coming in the January issue of Power Engineering

WORLDS BIGGEST

AND BEST!
2015 Global Ranking of the Power Industrys Leading Companies, certain to
become Power Engineerings most-read contentever.
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1412PE_21 21

12/15/14 11:50 AM

MARKET RESEARCH

Southern Co.s Kemper County power plant, a 550-MW

integrated gasification combined cycle (IGCC) facility
in eastern Mississippi, will be the first large-scale coal
plant in the U.S. to use carbon capture and storage
technology. Photo courtesy: Mississippi Power

POWER PRODUCERS
LIKELY TO RETROFIT
EXISTING PLANTS
Over one-half of executives we spoke
to indicated they are Very likely to
initiate work toward the retrofit of an
existing plant in the next 1 to 3 years.
This is a 25 percent increase compared
with the 2012 survey.
When asked which areas will be addressed in their retrofit activity, more
than 73 percent indicated they will
add equipment as a response to emission reduction requirements.
Other key retrofit activities being
planned by power producers include:
Replace existing equipment with
more efficient generating equip-

EPC FIRMS:
Are they Meeting
the Needs of Power
Generators?

BY RICK FLASPOHLER, FLASPHLER RESEARCH GROUP

n partnership with Power Engineering magazine, Flasphler

Research Group of Kansas City
performed an eye-opening survey of 64 key power generation
executives to measure the utilization,
performance and perceptions of engineering, procurement and construction
(EPC) firms serving the power generation industry. Thirty two EPC firms were
evaluated.
In addition to gauging the performance of EPC firms, this report also examines the level of construction activity
(retrofits/expansions) power producers
are planning in the next few years.
To achieve the highest level of accuracy, adaptive interviewing methodologies
were used in fielding this survey. Adaptive interviewing recognizes that each
respondents experience is different, and
so too should be each set of questions.
22

1412PE_22 22

Rather than put every question to every

power producer, only questions about
issues known to be important to each
power industry executive were asked.
This means that executives were asked to
evaluate only EPC firms with which he
or she was familiar. Further, they were
only asked to rate familiar firms on issues important to them, personally.
Adaptive interviewing removes much
of the bias toward larger firms commonly seen in most surveys and levels the
playing field for smaller firms.
Power Industry executives who completed the survey believed we asked the
right questions. In response to the inquiry, Do you have the impression that
the information collected in this survey
provides EPC firms with valuable information about where they should focus?
95 percent of power industry executives
answered Yes.

ment (54.1 percent)

Change fuel type (35.1 percent )
Add capacity (29.7 percent)
Add combined cycle plant capabilities (29.7 percent)
Add new fuel capabilities (24.3
percent)
Add carbon capture systems (21.6
percent)
Enhance cooling systems (13.5
percent)

POWER PRODUCERS STILL

BULLISH ON NEW PLANTS
Forty five percent (45 percent) of
power producers indicate they will
begin work on development of a new
power plant in the next 5 years, about
the same proportion as in the 2012
study (50 percent).
Of those producers likely to build
a new plant, the proportion indicating natural gas will be the fuel source
rose from 74 percent in 2012 to 79.2
percent.
While the proportion of producers
www.power-eng.com

12/15/14 11:49 AM

who would consider solar, wind, coal, and biofuel

remained about the same, petroleum climbed from
6.4 percent in 2012 to 29.2 percent in this years
study.

SATISFACTION WITH
EPC FIRMS FALLS
In the 2012 article in Power Engineering, it was
noted that, given the anticipated surge in activity expected over the next five years in the power generation sector, it was somewhat disconcerting that that
so few power generators were Very Satisfied with
the EPC firms they used.
More disconcerting today is that power generator
satisfaction with the EPC firms they use has plunged
even further, dipping from 26 percent in 2012 to just
19.7 percent in our just completed survey.
Given this dip in satisfaction, it should come as no
surprise that one in five power generators indicate
they will hire a new EPC firm to replace a firm with
whom they are currently working. Additionally, 30
percent of power generators indicate they will engage new firms in an effort to better meet their expertise and customer satisfaction requirements.
Because there continues to be great demand for
EPC services, several EPC firms today are mistakenly rolling along under the misperception that everything is all right. After all, billings are growing, demand is high and many firms indicate they already
have trouble staffing up to complete the jobs already
awarded to them.
However, many of the firms who believe that all
is good simply because theyve got as much work as
they can handle will be in for an unpleasant surprise
when demand for services drops, or when a strong
competitor has some excess capacity.

CLIENT ADVOCATE SCORE: THE

BEST MEASURE OF
CLIENT SATISFACTION
As illustrated in Table 5 (page 25), the primary resource power generators most rely upon for useful information about EPC firms is advice from peers.
This is a critical fact that few EPC firms understand,
and even fewer at their peril - bother to measure.
Most power generator executives are more than
eager to tell us that, while all EPC firms talk a great
game when it comes to client service and satisfaction, very few actually measure these important
items. One executive wryly noted, Its an industry

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1412PE_23 23

12/15/14 11:49 AM

Top Rated EPC Firms

Top Scoring Firm

Rated "7" or higher on 9-point

scale (alphabetical order)

Burns & McDonnell

AMEC, Babcock & Wilcox,

Bechtel, Black & Veatch, Burns &
McDonnell, Burns and Roe, KBR,
Kiewit Corporation, Sargent &
Lundy, URS, Zachry Holdings

Enercon Services

ABB, Babcock & Wilcox, Bechtel,

Black & Veatch, Burns &
McDonnell, Enercon Services,
HDR, Kiewit Corporation,
Power Engineers, Inc., Stanley
Consultants, URS

Zachary Holdings

AMEC, Black & Veatch, Burns

& McDonnell, Burns and Roe,
Fluor, Kiewit Corporation, Stanley
Consultants, URS, Zachry
Holdings

Employs Superior
Internal Project
Management

Kiewit Corporation

ABB, Bechtel, Black & Veatch,

Burns & McDonnell, Fluor, Kiewit
Corporation, Sargent & Lundy,
URS, Wrtsil NA

Maintains Strong
Working Relationships

AMEC

AMEC, Burns & McDonnell, HDR,

URS

Stanley Consultants

Black & Veatch, Burns &

McDonnell, Burns and Roe, HDR,
KBR, Sargent & Lundy, Stanley
Consultants,Tetra Tech, URS

Delivers Quality
Products & Services

Burns & McDonnell

AMEC, Babcock & Wilcox, Burns

& McDonnell, Harris Group, HDR,
KBR, Kiewit Corporation, Sargent
& Lundy, Stanley Consultants,
Tetra Tech, URS

Offers Excellent Value

Burns & McDonnell

Burns & McDonnell,Tetra Tech,

URS

Evaluation Factor

Is an Exceptional
Company

Successfully employs
State of the Art
technology

Presents a Practical
Approach to Contracts

Provides Responsive
Service

Source:

Retrofts
How likely is your
company to initiate
work toward the
retrofit of an existing
plant in the next 1 to
3 years?
Source:
24

1412PE_24 24

2
Very Likely

50.9%

Somewhat Likely

18.9%

Neither Likely Nor Unlikely

15.1%

Somewhat Unlikely

7.5%

Very Unlikely

7.5%

full of brilliant engineers who can calculate anything, except whether or not
were happy with the services they provide.
Perhaps the best measure of client satisfaction is Client Advocate Score (CAS).
In 2003, researchers everywhere
were stunned by an article in the Harvard Business Review titled The One
Number You Need to Grow by Frederick Reichheld, a director emeritus of
the consulting firm Bain & Co. What
Reichheld discovered in a study of
more than 4,000 consumers is that a
company can, very accurately, anticipate its success based on how customers answer the question: How likely is
it you would recommend (company X)
to a colleague?
If growth is what youre after, you
wont learn much from complex measurements of customer satisfaction
or retention, Reichheld writes. You
simply need to know what your customers tell their colleagues about you.
Based on the answers to this question,
a CAS is calculated. A companys CAS is
simply a net measure of whether or not
a companys clients are advocating usage
of the company to colleagues.
In this years survey, we asked power
executives how likely they would be to
recommend the EPC firms they currently use. The CAS for each of these
firms was then calculated. While the
average CAS for all professional-services industries we measure is, surprisingly, about 0, the average for insurers
in this survey is -1.5. In other words,
the typical EPC firm today will have a
greater proportion of clients cautioning against use of the firm than proportion recommending the firm.
There are, of course, EPC firms
whose clients are very happy.
The highest CAS in the survey was
57.1, for Foster & Wheeler. The lowest
CAS in the survey was -66.7.
A&E firms earning CAS scores of
15 or higher, in alphabetical order, are
ABB, AMEC, Babcock & Wilcox, Black
www.power-eng.com

12/15/14 11:49 AM

& Veatch, Burns & McDonnell, Foster &

Wheeler, HDR, Kiewit Corporation, Parsons Brinckerhoff, Stanley Consultants,
Wrtsil NA and Zachry Holdings.

EPC FIRMS RECEIVING

HIGHEST QUALITY
RATINGS
Another important measure of client
satisfaction is how well firms perform
on the specific factors most important
to power generators when they evaluate EPC firms.
Power generators were asked to rate
those firms with whom they were familiar, on those factors they felt were
most important in their own EPC firm
evaluation and selection process.
The top rated firm on each factor is
listed in Table 1, which shows seven
different firms receiving top ratings
for eight different evaluations factors.
Only Burns & McDonnell received a
top rating for more than one factor.
Also shown is each of the A&E firms
who received an average rating of 7
or higher on each evaluation factor. A
rating of 7 or higher is typically associated with performance excellence
on a given factor. (The scale was 1 to 9
with 9 = Very Strong and 1 = Very Weak.)
The number of A&E firms receiving a
7 or higher rating is high for most factors. However, the scarcity of firms earning this rating for the factors Provides
Responsive Service and Offers Excellent
Value is indicative of an industry whose
players focus so much on the technical
aspects of the product that they often
overlook the relationship/customer service part of the business.
Further evidence of the general decline in relationship/customer service
performance of EPC firms can be
found when comparing the average
EPC firm rating in 2012 versus 2014.
Average EPC firm ratings dropped on
six of eight factors.
The only factors upon which power
generators saw improved performance,
overall, were Employs Superior Internal
www.power-eng.com

1412PE_25 25

New Construction
How likely is your
company to begin
work on development
of a new power plant
in next 5 years?

3
Very Likely

28.3%

Somewhat Likely

17.0%

Neither Likely Nor Unlikely

24.5%

Somewhat Unlikely

5.7%

Very Unlikely

24.5%

Source:

Fuel of Choice

Q31 - Which fuel

sources will you
consider most
seriously for the new
plant(s)?

4
Gas - natural

79.2%

Petroleum

29.2%

Solar

25.0%

Wind

25.0%

Coal

20.8%

Hydroelectric

20.8%

Biofuel

12.5%

Gas - other

12.5%

Nuclear

12.5%

Wood

8.3%

Source:

Infuencers

Which of the following

do you rely on for
useful information
about A & E services
and firms?

5
Advice from peers

58.3%

Industry web sites and

publications

40.0%

General Business News

Press

36.7%

Advice from equipment

suppliers

36.7%

Industry Association
Meetings

33.3%

Web sites of A & E Firms

33.3%

Department of Energy
publications

21.7%

Department of Energy web

site

15.0%

Source:

Project Management and Is an Exceptional Company.

HOW EASY ARE EPC FIRMS

TO DO BUSINESS WITH?
A final metric used to help EPC firms
better meet power generator needs is
Ease of Doing Business (EODB).
EODB
measures
the
overall

perception of whether power generators believe each EPC firm is easy to

work with or difficult to work with.
The question is simple; How easy
is it to do business with (EPC firm)?
Power generators answer with a number from 1 to 10, where 10 = Very Easy
to Do Business With and 1 = Very Difficult to Do Business With.
25

12/15/14 11:49 AM

Duke Energys Cliffside Modernization Project.

Duke Energy renamed Cliffside the James E. Rogers Energy Complex after former CEO Jim Rogers.
Photo courtesy: Duke Energy

Any score of 7 or higher is considered good, and scores of 8 or higher

are considered exceptional.
Today, only four EPC firms are considered exceptional by power generators
in how easy they are to do business with.
These firms (in alphabetical order) are
AMEC, Burns & McDonnell, Kiewit Corporation, and Zachry Holdings.
The 7 A&E firms receiving ratings of
7 or higher are: (alphabetical order)
Babcock & Wilcox, Black & Veatch,
HDR, Sargent & Lundy, Stanley Consultants, URS and Wrtsil NA.

LOOKING AHEAD
A recent period of increasing demand
for EPC expertise has resulted in in a
sort of renaissance for firms active in the
26

1412PE_26 26

power generation market.

Old-line, well established firms enjoy
being in a position to focus on the most
attractive opportunities. Smaller and
newer firms are making steady inroads
as they pick up assignments that the
long established EPC firms are unable or
unwilling to take on.
As power generators are exposed to
more EPC firm options, the perceived
differences between firms are shrinking,
especially in areas related to technical expertise and technology. The result is that
power generators look more carefully at
pricing, since they are less likely to see significant differences between firms.
As the perception of EPC firms becomes more commoditized, power generators will begin to examine pricing

more carefully. Evidence that this is already happening is that the factor upon
which power generators rate EPC firms
the lowest is Offers Excellent Value.
This will play out the way it does in
most professional services markets, with
power generators increasingly looking at
responsive service and relationship
factors as being key in EPC firm evaluation and selection.
In short, the days are almost over
when all an EPC firm had to offer to be
successful was great technical expertise
and technology. Power generators today
also want excellent customer service and
strong relationships.
If you are an EPC firm interested in
learning more, contact Rick Flasphler
at rflaspohler@flaspohler.com.
www.power-eng.com

12/15/14 11:49 AM

SAVE THE DATE

DEC. 810, 2015
LAS VEGAS CONVENTION CENTER
LAS VEGAS, NV
POWER-GEN.COM

THE WORLDS

LARGEST
POWER GENERATION EVENT

OWNED & PRODUCED BY:

PRESENTED BY:

SUPPORTED BY:

For info. http://powereng.hotims.com RS#12

1412PE_27 27

12/15/14 11:49 AM

INDUSTRY REPORT

The Power Plant Operating Performance Report is

published annually in Electric Light & Power magazine,
one of Power Engineerings sister publications. Pictured is the John W. Turk Power Plant. Courtesy: AEP

2013
Operating
Performance
Coal Comes Back Slightly in 2013

BY TERESA HANSEN, EDITOR IN CHIEF, ELECTRIC LIGHT & POWER MAGAZINE

fter three consecutive

years of declining generation, coal-fired power plants made a slight
comeback in 2013. The
2013 power plant performance report
28

1412PE_28 28

reveals that all Energy Information

Agency (EIA)-reporting coal-fired power plants generated nearly 3.5 percent
more electricity in 2013 than in 2012.
The increase is attributed primarily to
higher natural gas prices, which made

coal more economic in 2013. Natural

gas hit a record low spot price of $1.80
per million British thermal unit (mmBtu) at the Henry Hub in 2012, and the
average spot price at the Henry Hub
that year was $2.77 per mmBtu, according to EIA data. That average jumped
35 percent to $3.73 in 2013, which was
enough of an increase to cause some
coal-fired plants to move up in the dispatch order.
The increase in coal-fired generation
had a slight impact on emission. The
CO2 level in 2013 was 2 percent higher
than the 2012 level, according to the
EIA.
This increase of coal-fired power
www.power-eng.com

12/15/14 11:45 AM

Top 20 Coal Ranked by Generation (2013)

Rank

Owner/Operator

Plant

State

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Southern Co.
Southern Co.
FirstEnergy
Duke Energy Corp.
Ameren Corp.
Salt River Project
DTE Energy Co.
AEP
AEP
Luminant
NRG
MidAmerican Energy
AEP
TVA
Westar Energy
AES Corp.
PPL Corp.
NRG
PPL Corp.
FirstEnergy

Miller
Scherer
Bruce Mansfield
Gibson
Labadie
Navajo
Monroe
Rockport
Gen. J. M. Gavin
Martin Lake
W. A. Parish
Jim Bridger
John E. Amos
Cumberland
Jeffrey
J.M. Stuart
Ghent
Limestone
Colstrip
Harrison

AL
GA
PA
IN
MO
AZ
MI
IN
OH
TX
TX
WY
WV
TN
KS
OH
KY
TX
MT
WV

Top 20 Generating
EIA Reporting

Capacity
MW

Generation
GWh

2,675
3,423
2,510
3,157
2,447
2,250
3,135
2,600
2,598
2,455
2,499
2,111
2,900
2,522
2,179
2,308
1,932
1,689
2,094
1,984

20,446
20,259
17,489
17,331
17,295
17,132
16,183
15,808
15,677
15,253
15,222
14,817
14,312
13,569
13,372
13,314
13,154
12,872
12,738
12,707

Total
49,468
306,817

Total
308,950
1,548,977

Capacity
Factor
87.2%
67.6%
79.5%
62.7%
80.7%
86.9%
58.9%
69.4%
68.9%
70.9%
69.5%
80.1%
56.3%
61.4%
70.1%
65.9%
77.7%
87.0%
69.4%
73.1%

Fuel
Consumption
mmBtu
211,126,418
209,944,877
176,520,201
179,536,594
176,285,010
173,630,418
162,733,221
155,975,375
158,822,147
167,676,053
160,716,157
152,600,705
143,510,896
138,712,401
148,069,363
132,168,644
143,322,094
132,375,967
135,760,144
125,798,231

Heat Rate
mmBtu/
MWh
10.33
10.36
10.09
10.36
10.19
10.14
10.06
9.87
10.13
10.99
10.56
10.30
10.03
10.22
11.07
9.93
10.90
10.28
10.66
9.90

72.2%
57.6%

Total
3,185,284,916
16,130,063,115

Average
10.32
10.41

Average

2012
Rank
5
1
4
3
9
7
8
2
6
10
17
16
19
12

Source:

Top 20 Coal Ranked by Capacity Factor (2013)

Rank

Owner/Operator

Plant

State

1
2
3
4
5
6
7
8
9
10
11
12
13
14

Platte River
FirstEnergy Corp.
Black Hills Corp.
Black Hills Corp.
Yellowstone
MidAmerican Energy
Edison International
Minnesota Power
Big Rivers
Luminant
Suez
Great River Energy
Xcel Energy Inc.
Deseret Power Electric
Cooperative
Golden Valley Electric
Association
Southern Co.
AES
Colorado Springs
Utilities
NRG Energy Inc.
Salt River Project

Rawhide
Bay Shore
Wygen III
Neil Simpson II
Yellowstone
Naughton
Grant Town
Clay Boswell
D.B. Wilson
Sandow No. 5
Coleto Creek
Coal Creek
Tolk
Bonanza

CO
OH
WY
WY
MT
WY
WV
MN
KY
TX
TX
ND
TX
UT

Healy

15
16
17
18
19
20

280
136
100
80
55
687
80
965
417
570
592
1,138
1,067
458

2,352
1,140
836
655
449
5,534
641
7,724
3,325
4,536
4,694
8,837
8,279
3,509

95.9%
95.7%
95.4%
93.5%
93.1%
92.0%
91.5%
91.4%
91.0%
90.8%
90.4%
88.6%
88.6%
87.5%

Fuel
Consumption
mmBtu
23,446,241
14,580,328
9,321,775
8,388,548
4,969,447
59,140,736
8,554,444
81,853,994
35,183,097
48,768,416
46,107,188
93,361,183
83,170,653
36,157,080

AK

25

191

87.4%

2,589,081

13.53

Miller
AES Hawaii
Ray D. Nixon

AL
HI
CO

2,675
180
208

20,446
1,375
1,587

87.2%
87.2%
87.1%

211,126,418
13,883,001
16,811,020

10.33
10.10
10.60

Limestone
Navajo

TX
AZ

1,689
2,250

12,872
17,132

87.0%
86.9%

132,375,967
173,630,418

10.28
10.14

Total
13,652
306,817

Total
106,113
1,548,977

90.4%
57.6%

Total
1,103,419,036
16,130,063,115

Average
10.97
10.41

Top 20 Capacity Factors

EIA Reporting

Capacity
MW

Generation
GWh

2
Capacity
Factor

Average

Heat Rate
mmBtu/
MWh
9.97
12.79
11.15
12.81
11.08
10.69
13.34
10.60
10.58
10.75
9.82
10.57
10.05
10.30

2012
Rank

6
3
8

19
2
15

Source:
www.power-eng.com

1412PE_29 29

29

12/15/14 11:45 AM

Top 20 Coal Ranked by Heat Rate (2013)*

Rank

Owner/Operator

Plant

State

1
2
3
4
5
6
7
8
9
10
11

AEP
First Reserve Corp.
Great Plains Energy
LS Power Group
Duke Energy Corp.
Duke Energy Corp.
SCANA Corp.
Cleco Power LLC
Duke Energy Corp.
NRG Energy Inc.
WE Energies

John W.Turk, Jr.

Longview
Iatan 2
Sandy Creek
Belews Creek
Cliffside
Cope
Brame Energy Center
Marshall
Keystone
Elm Road

12
13
14
15
16
17
18
19

LADWP
NRG Energy Inc.
Duke Energy Corp.
Xcel Energy Inc.
SCANA Corp.
CPS Energy
GenOn Energy
Associated Electric
Cooperative Inc.
Southern Co.

20

Capacity
MW

Generation
GWh

AR
WV
MO
TX
NC
NC
SC
LA
NC
PA
WI

609
700
881
939
2,270
1,381
415
628
2,078
1,700
1,268

3,846
4,457
6,042
3,366
12,536
6,220
2,446
4,042
8,360
12,455
3,351

Intermountain
Conemaugh
W.H. Zimmer
Valmont
Williams
J.K. Spruce
Avon Lake
New Madrid

UT
PA
OH
CO
SC
TX
OH
MO

1,800
1,700
1,300
184
610
1,340
710
1,199

12,387
11,760
9,362
994
3,344
7,536
2,892
8,194

Bowen

GA

Capacity
Factor
72.1%
72.7%
78.3%
40.9%
63.0%
51.4%
67.3%
73.5%
45.9%
83.6%
30.2%

Fuel
Consumption
mmBtu
34,069,108
40,623,185
55,152,398
30,806,238
114,913,240
57,064,445
22,481,012
37,893,807
79,052,567
117,876,401
32,085,709

Heat Rate
mmBtu/
MWh
8.858
9.115
9.128
9.151
9.167
9.174
9.192
9.376
9.456
9.464
9.576

78.6%
79.0%
82.2%
61.7%
62.6%
64.2%
46.5%
78.0%

119,400,452
113,575,163
91,014,788
9,669,147
32,517,385
73,363,174
28,221,235
80,128,109

9.639
9.658
9.722
9.724
9.725
9.735
9.757
9.779

3,232

12,037

42.5%

118,132,826

9.814

Total
135,627

Average
63.7%

Total
1,288,040,389

Average

Top 20 Heat Rates

Total
24,944

EIA Reporting

306,817

1,548,977

57.6%

16,130,063,115

2012
Rank

2
4
7
8

11
18
10
15
9

9.46
10.41

*Excludes co-generating facilities

generation and CO2 levels wont continue, however, because some coal-fired
power plants will be retired in 2015
and 2016 as the Mercury and Air Toxics
Standards (MATS) take effect. The recently proposed Clean Power Plan also
will put more coal plants on the retirement list.
The Clean Power Plan will affect
coal-fired plants, said Tom Hewson,
principal at Arlington, Virginia,-based
Energy Ventures Analysis Inc. They
will be affected differently from state to
state.
The total amount of electricity generated by all reporting gas-fired combined-cycle power plants in 2013 is
nearly 100 GWh less than the total
amount reported by all generators in
2012a drop of some 11.4 percent. The
capacity of all reporting gas-fired combined-cycle power plants increased in
2013, however.
Energy Ventures Analysis, a market
analysis firm that specializes in energy
30

1412PE_30 30

and environment, compiled the data

that reveals this information and more.
The firm, which has provided the data
for this industry report many years, obtains the data from Form EIA 923 Power Plant Report. The tables in the report
do a good job of telling the story, but a
few observations follow.

COAL-FIRED POWER PLANT

PERFORMANCE

Coal Generation: Table 1

As I say every year, to be in this list,
you must be a big coal station with multiple large units, Hewson said.
Table 1 backs Hewsons statement.
Fourteen of 2012s top 20 generators
returned to the list in 2013. The top 10
generators in 2012 remained the top
10 generators in 2013, but the order
changed.
Hewson said a few coal-fired plants
are under construction, and a few more
will be constructed in the next several years. He doesnt expect any of the
plants under construction to affect this

top 20 list.
The few plants that are under construction are small enough that they
wont break into the top 20 generation
list, Hewson said. This list isnt likely
to change much in the next few years.
Unlike 2012 when the top 20 generating plants produced less electricity
than the year before, the top 20 in 2013
increased their production slightly and
generated 1,565 GWh more electricitya six-tenths of 1 percent increase.
Coal Capacity Factor: Table 2
Overall, the coal-fired capacity factors for 2013 were similar to 2012 because of continued natural gas displacement. The threshold to make the list
varied little86.9 percent in 2013 vs.
87.0 percent in 2012.
The plants with high capacity factors
generally fall into one of two categories,
Hewson said. They are either cogeneration units with steam contracts that require high utilization or they are Western coal units with highly competitive
www.power-eng.com

12/15/14 11:45 AM

Top 20 Coal Generators Ranked by SO2 Emission Rate (2013)*

megawatt-hour rates.
The No. 1 capacity factor
rating was much higher in
2012 than 2013: 111.2 percent vs. 95.9 percent.
The reason for the dropoff is attributed primarily to
a difference in reporting requirements and does not reflect a major change in operating performance, said
Philip Graeter, an analyst at
Energy Ventures Analysis.
Small coal generators are
not reporting their generation output on a monthly
basis as theyve done in the
past, Graeter said. They,
therefore, are not included
in the 2013 power plant performance ratings.
When included in the
data, Graeter said, these
small generators usually

Rank

Owner/Operator

Plant

State

1
2
3
4
5
6
7
8

Ameren Corp.
Ameren Corp.
WE Energies
Southern Co.
Southern Co.
Dominion
Ameren Corp.
Lower Colorado
River Authority
Ameren Corp.
WE Energies
Public Service
Enterprise Group
Salt River Project
WE Energies
Westar Energy
Texas Municipal
Power Agency
Duke Energy Corp.

Iatan 2
Coffeen
South Oak Creek
Hammond
James H. Miller Jr
Virginia City
Iatan
Fayette

9
10
11
12
13
14
15

MO
IL
WI
GA
AL
VA
MO
TX

SO2
Mass tons
74
109
132
32
799
146
214
1,126

Heat Input
mmBtu
56,358,124
50,679,191
54,193,245
10,363,370
228,061,389
36,236,559
46,876,300
117,267,131

SO2 Rate
Lb./mmBtu
0.0026
0.0043
0.0049
0.0062
0.0070
0.0081
0.0091
0.0192

2012
Rank

Duck Creek
Elm Road
Hudson 2

IL
WI
NJ

231
378
133

23,561,777
35,102,373
12,012,446

0.0196
0.0215
0.0222

9
4
12

Coronado
Pleasant Prairie
Jeffrey
Gibbons Creek

AZ
WI
KS
TX

843
1,174
2,084
438

67,594,159
91,878,292
153,727,333
28,933,336

0.0249
0.0256
0.0271
0.0303

15
6
5

2
8
3
7

Cliffside

NC

859

56,371,256

0.0305

17
18
19

CPS Energy
Newmont Mining
Public Service
Enterprise Group

J. K. Spruce
TS Power Plant
Mercer

TX
NV
NJ

1,231
240
70

80,547,848
15,092,348
3,610,164

0.0306
0.0319
0.0389

11
14

20

Black Hills Corp.

Wygen II

WY

18

16

172

7,975,895

0.0430

Top 20

Total
10,487

Total
1,176,442,535

Average
0.02038

EIA Reporting

3,204,879

16,803,284,681

0.3815

* Excludes non-reporting and non-electric sector facilities

Top 20 Coal Generators Ranked by NOX Emission Rate (2013)*

Rank
1
2
3
4
5
6
7
8
9
10
11

Owner/Operator
Archer Daniels Midland
GenOn
Suez
Basin Electric
AEP
Black Hills Corp.
Rich Family Companies
Newmont Mining
Dominion
NRG Energy Inc.
Rich Family Companies

State
IL
MD
PA
WY
AR
WY
PA
NV
VA
TX
PA

12
13
14
15
16

Plant
Peoria
Morgantown
Northeastern
Dry Fork Station
John W. Turk, Jr.
Wygen III
St. Nicholas Cogen
TS Power Plant
Chesterfeld
W. A. Parish
John B. Rich Memorial
Power Station
Ameren
Iatan 2
Cargill
Corn Wet Milling
American Municipal Power Inc. Prairie State
Seminole
Seminole
Duke Energy Corp.
Cliffside

NOx Mass tons

9
665
109
636
724
195
225
334
1,443
4,024
209

Heat Input mmBtu

897,548
38,738,795
5,908,730
34,212,005
35,154,531
9,321,777
10,248,648
15,092,348
61,219,702
161,716,492
8,307,127

NOx Rate Lb./mmBtu

0.0196
0.0343
0.0370
0.0372
0.0412
0.0417
0.0440
0.0443
0.0471
0.0498
0.0504

17
18
19

Cleco Corp.
WE Energies
JEA

20

AES Corp.

MO
TN
IL
FL
NC

1,448
2
2,388
2,064
1,607

56,358,124
88,039
87,695,475
74,403,181
56,371,256

0.0514
0.0522
0.0545
0.0555
0.0570

Brame Energy Center

Elm Road
Northside

LA
WI
FL

1,248
1,016
1,009

43,537,445
35,102,373
34,551,625

0.0573
0.0579
0.0584

13
8

Deepwater

TX

0.0589

44
Total

Top 20
EIA Reporting

1,492,955
Total

2012 Rank
1
3
2
10
4
5
6
11
7

15
12

Average

19,399

770,418,174

0.04748

1,593,745

16,803,284,681

0.1897

* Excludes non-reporting and non-electric sector facilities

www.power-eng.com

1412PE_31 31

31

12/15/14 11:45 AM

Top 20 Nuclear Ranked by Generation (2013)

Rank

Owner/Operator

Plant

Pinnacle West
Capital Group
TVA
Duke Energy Corp.
Luminant
Exelon Corp.
Exelon Corp.
Exelon Corp.
PSE&G
Duke Energy Corp.
Southern Co.
PPL Corp.

Palo Verde

AZ

Browns Ferry
Oconee
Comanche Peak
Braidwood
Byron
Limerick
Salem
Catawba
Vogtle
Susquehanna

AL
SC
TX
IL
IL
PA
NJ
SC
GA
PA

3,401
2,595
2,460
2,384
2,346
2,386
2,388
2,326
2,302
2,620

26,718
21,021
20,487
19,662
19,547
19,542
19,208
19,166
19,079
18,899

89.7%
92.5%
95.1%
94.1%
95.1%
93.5%
91.8%
94.1%
94.6%
82.3%

McGuire
Peach Bottom
LaSalle County
Sequoyah
Diablo Canyon

NC
PA
IL
TN
CA

2,312
2,326
2,313
2,333
2,240

18,898
18,835
18,760
18,526
18,012

93.3%
92.4%
92.6%
90.7%
91.8%

17
18
19

Duke Energy Corp.

Exelon Corp.
Exelon Corp.
TVA
Pacifc Gas &
Electric Corp.
NRG Energy Inc.
Dominion
AEP

South Texas
Millstone
Donald C. Cook

TX
CT
MI

2,560
2,117
2,191

17,828
17,080
16,280

79.5%
92.1%
84.8%

20

Exelon Corp.

Nine Mile Point

NY

1,785

15,846

101.3%

2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Top 20 Generating
EIA Reporting

State

Capacity
Generation Capacity
MW
GWh
Factor
3,937
31,431
91.1%

Total
Total
Average
49,321
394,825
91.6%
102,374

789,117

88.0%

bump up the top capacity factor performance.

The lack of data for small generators
is partially behind the big shake-up in
the list. Only six plants on the 2012 list
returned in 2013.
The annual generation data for the
small generators should be available in
January 2015.
Coal Heat Rate: Table 3
In last years report, Hewson predicted that AEPs John W. Turk plant would
be near the top of the list, and he was
right. The Turk plant, which reached
full operation in 2013, came in at No.
1, knocking First Reserves Longview
plant out of the top spot. The Turk
plant is the only ultrasupercritical U.S.
plant, and, as such, achieved the best
heat rate.
The qualifying coal heat rate was
lower in 2013 than 2012: 9,814 mmBtu/MWh vs. 9,874 mmBtu/MWh,
32

1412PE_32 32

respectively, indicating that the most

efficient U.S. coal plants became a
little more efficient in 2013 largely because of the addition of another ultrasupercritical plant to the fleet.
In the past, parasitic load of pollution controls were a differentiating
factor. That is no longer an issue. In
todays operating environment, postcombustion controls are needed for
continued operation.
The current trend of improving heat
rate might be hard to continue, Hewson said.
In the Clean Power Plan, the EPA is
making the assumption that all coalfired plants can improve their heat rate
by 6 percent, he said. But its important, at least in my mind, to remember
that when we reduce the utilization of
coal plants, their efficiency will decrease. So we will likely see a reduction
in heat rate performance rather than

the 6 percent increase assumed by the EPA.

2012
Coal SO2 Emissions:
Rank
1
Table 4
The SO2 emission rate
2
for 2013 was 0.0430 lbs./
3
mmBtu, which was less than
4
the 2012 rate of 0.0512 lbs./
8
mmBtu.
11
All the units in this top 20
12
list operate flue gas desulfur7
14
ization (FGD) scrubbers that
6
remove more than 90 per18
cent of coal sulfur.
13
Only six units dropped off
9
the list from 2012 to 2013,
5
but Graeter expects the turn19
over to increase.
16
Well see more and more
scrubbers come online in
10
17
the next few years, which
15
will add more competition,
Graeter said. It is quite an
accomplishment to reach
this list.
Units that burn lower initial sulfur content coals like
Powder River Basin and Western bituminous have an advantage of reaching
lower emission rates because they start
with less sulfur and need to remove a
lower percentage to meet a given limit,
Graeter said.
The turnover in this group in combination with extremely low emission
rates indicate how difficult it is to remain on list, Hewson said.
Given low SO2 allowance costs, the
overcompliance benefit is very small,
he said. Yet units continue to overcomply significantly with limits.
Coal NOX Emissions: Table 5
To qualify for the 2013 top 20 ranking in this category, coal plants must
have a NOX rate of 0.0589 lbs./mmBtu
or less, which is nearly the same as the
2012 threshold of 0.0590 lbs./mmBtu
or less.
All units in this list are equipped
with post-combustion NOX controls,
www.power-eng.com

12/15/14 11:45 AM

Graeter said.
The turnover on this list was low. Fourteen plants from
the 2012 list returned in 2013.
The extremely low emission rates indicate how difficult
it is to make it onto this list and remain on it, Hewson
said. Small control upsets are enough to throw a plant off
the list.
The average total emission rate of all reporting plants
dropped considerably from 2012 to 2013: 0.2270 lbs./
mmBtu vs. 0.1897 lbs/mmBtu.
Graeter said that total emissions of all reporting plants
will continue dropping as heavy emitters retire.

7 FINANCING
YRS

SPECIAL

ZERO DOWN For one year on

NO INTEREST Fabric Structures
NO PAYMENTS

RESTRICTIONS APPLY

NUCLEAR POWER
PLANT PERFORMANCE
Nuclear Generation: Table 6
The nuclear club is still as exclusive as ever, Hewson
said.
There isnt much new that can be said about plants on
this list. The units are heavily used because their fuel is
cheap and they are
at the top of the disIn the Clean
patch list.
Power Plan, the
The top four nuclear plants on the 2013
EPA is making the
generation list were
assumption that
the same four plants
all coal-fired plants in 2012 in the same
can improve their
order. Nineteen of the
plants on the 2013
heat rate by 6
top 20 generating list
percent,
appeared on the 2012
- Tom Hewson, Energy
list. The only plant
that did not return to
Ventures Analysis
the list in 2013 was
Quad Cities, which ranked No. 20 in 2012. It was replaced
by Nine Mile Point in 2013, also ranked at No. 20.
Hewson expects the list to remain much the same for the
next couple of years until new units come online.
Nos. 1 and 2 arent likely to change until the new Vogtle
units come online, Hewson said. Palo Verde and Browns
Ferry are large multi-unit plants.
In addition to Southern Co.s Vogtle units 3 and 4 in
Georgia, which are expected to come online in 2017 and
2018, three more nuclear units are under construction.
They are SCANA Corp.s and Santee Coopers V.C Summer
Units 2 and 3 in South Carolina, expected to come online
in 2017 and 2018, and TVAs Watts Bar Unit 2, expected to
come online in 2015. Once these units are brought online,
there will be some movement in the top 20 generation list.
The San Onofre Station in California and Kewaunee in Wisconsin retired in 2013, yet the total capacity of all reporting
units increased because some nuclear units were uprated.

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1412PE_33 33

12/15/14 11:45 AM

Top 20 Nuclear Ranked by Capacity Factor (2013)

State

Rank

Owner/Operator

Plant

1
2
3

Nebraska PPD
Exelon Corp.
Exelon Corp.

Cooper
Nine Mile Point
Dresden

NE
NY
IL

4
5
6
7
8
9
10
11

NextEra Energy
Exelon Corp.
NextEra Energy
Exelon Corp.
Entergy Corp.
FirstEnergy Corp.
TVA
SCANA Corp.

Seabrook
R.E. Ginna
Duane Arnold
Quad Cities
Indian Point 2
Davis-Besse
Watts Bar
V.C. Summer

NH
NY
IA
IL
NY
OH
TN
SC

1,247
582
622
1,819
1,031
908
1,179
992

10,927
4,993
5,321
15,554
8,785
7,680
9,968
8,370

100.1%
97.9%
97.6%
97.6%
97.2%
96.6%
96.5%
96.3%

12
13
14
15
16

Exelon Corp.
Luminant
WE Energies
Southern Co.
Exelon Corp.

Byron
Comanche Peak
Point Beach
Vogtle
Braidwood

IL
TX
WI
GA
IL

2,346
2,460
1,199
2,302
2,384

19,547
20,487
9,942
19,079
19,662

95.1%
95.1%
94.7%
94.6%
94.1%

17
18
19

Duke Energy Corp.

Exelon Corp.
Exelon Corp.

Catawba
Calvert Cliffs
Limerick

SC
MD
PA

2,326
1,734
2,386

19,166
14,264
19,542

94.1%
93.9%
93.5%

20

Dominion

Surry

VA

1,750

14,321

93.4%

Uprates
are
usually
cheaper than new capacity,
Graeter said.
Nuclear Capacity Factor: Table 7
Most U.S. nuclear plants
run at extremely high capacity factors because of low fuel
and variable costs, Hewson
said.
The units on this list ran
flat out and were not down
for refueling, he said.
The threshold capacity factor for 2013 was higher than
in 2012: 93.4 percent vs. 92.3
percent. In addition, the capacity factor of all reporting
units rose from 86.3 percent
in 2012 to 88.0 percent in
2013.

Capacity
Generation Capacity
2012
MW
GWh
Factor
Rank
766
6,804
101.4%
1,785
15,846
101.3%
1,750
15,412
100.5%
7

17
20
11

Total
Total
Average
31,568
265,670
96.6%

Top 20 Capacity Factors

EIA Reporting

102,374

789,117

GAS-FIRED
COMBINED-CYCLE
POWER PLANT

88.0%

Top 20 Gas-fred Combined-cycle Ranked by Generation (2013)

Rank

Owner/Operator

Plant

1
2
3
4
5
6
7
8
9
10
11

NextEra Energy
Southern Co.
Duke Energy Corp.
NextEra Energy
Southern Co.
NextEra Energy
Duke Energy Corp.
NextEra Energy
Southern Co.
Southern Co.
Dominion

West County
Jack McDonough
Hines
Martin
Franklin
Sanford
Richmond
Forney
McIntosh
Barry
Fairless Energy

FL
GA
FL
FL
AL
FL
NC
TX
GA
AL
PA

12
13
14
15
16
17
18

Southern Co.
TECO Energy
Duke Energy Corp.
NextEra Energy
Duke Energy Corp.
Exelon Corp.
North American
Energy Services
MidAmerican Energy
Duke Energy Corp.

Victor J. Daniel, Jr.

Bayside
P. L. Bartow
Fort Myers
Hanging Rock
Mystic
La Paloma

MS
FL
FL
FL
OH
MA
CA

1,086
1,839
1,235
1,490
1,296
1,694
1,028

7,605
7,327
7,254
7,106
6,962
6,730
6,571

79.9%
45.5%
67.1%
54.4%
61.3%
45.4%
73.0%

53,746,443
54,431,154
53,377,345
54,566,490
55,593,462
49,909,999
47,080,756

7.067
7.429
7.358
7.679
7.985
7.416
7.165

Chuck Lenzie
H. F. Lee

NV
NC

1,170
1,049

6,554
6,548

64.0%
71.3%

47,146,080
45,860,854

7.193
7.004

19
20

Top 20 Generating
EIA Reporting

State

Capacity Generation Capacity

Fuel Consumption Heat Rate
2012
MW
GWh
Factor
mmBtu
mmBtu/MWh Rank
4,019
21,363
60.7%
149,928,868
7.018
2,739
18,130
75.6%
124,736,189
6.880
2,199
12,378
64.3%
89,397,224
7.222
2,176
10,807
56.7%
78,048,017
7.222
1,866
8,951
54.8%
63,435,723
7.087
2,077
8,920
49.0%
67,666,043
7.586
1,234
8,238
76.2%
56,548,302
6.864
1,880
8,199
49.8%
61,077,621
7.449
1,302
7,920
69.4%
55,321,095
6.985
1,064
7,818
83.9%
54,959,809
7.030
1,276
7,673
68.6%
54,847,626
7.148

1
4
2
3
5
7
8
16
14
12
13
17
20
9
10
11

Total
Total
Average
Total
Average
33,718
183,057
63.5%
1,317,679,100
7.24
230,819

872,514

43.2%

6,418,167,373

7.36

34

1412PE_34 34

www.power-eng.com

12/15/14 11:45 AM

Top 20 Gas-fred Combined-cycle Ranked by Capacity Factor (2013)

State

Rank

Owner/Operator

Plant

1
2
3
4

Lower Mount Bethel

Watson Cogen
Olin Cogen
Cosumnes

PA
CA
AL
CA

5
6
7
8
9
10
11

PPL Corp.
Tesoro Corp. / NRG Energy
Southern Co.
Sacramento Municipal
Utility District
Southern Co.
Entergy Corp.
International Paper Co.
Oklahoma Gas & Electric
Entergy Corp.
EIF Management
Santee Cooper

Barry
Louisiana 1
Riverdale Mill
McClain Energy
RS Cogeneration
Channelview Cogen
John S. Rainey

AL
LA
AL
OK
LA
TX
SC

1,064
389
40
459
447
874
530

7,818
2,846
290
3,309
3,215
6,281
3,801

83.9%
83.4%
82.8%
82.3%
82.2%
82.0%
81.9%

54,959,809
29,243,532
1,699,264
23,490,968
28,417,199
31,467,048
27,508,959

7.030
10.277
5.854
7.100
8.839
5.010
7.237

12
13
14
15
16
17
18
19
20

Elk Hills Power LLC

Occidental Petroleum
GE
Southern Co.
GE
ExxonMobil
Consolidated Edison
New York Power Authority
Shell

Elk Hills Power

Saguaro Power Co.
Cardinal Cogen
Victor J. Daniel, Jr.
River Road
Beaumont Refnery
East River
Poletti Expansion
March Point Cogen

CA
NV
CA
MS
WA
TX
NY
NY
WA

549
105
52
1,086
248
677
358
496
154

3,914
742
362
7,605
1,730
4,660
2,440
3,372
1,042

81.4%
80.7%
80.3%
79.9%
79.6%
78.6%
77.8%
77.6%
77.2%

27,998,030
6,821,608
3,817,833
53,746,443
12,498,094
24,778,214
26,757,007
24,628,416
6,334,303

7.154
9.194
10.538
7.067
7.225
5.317
10.966
7.304
6.078

Top 20 Capacity Factors

EIA Reporting

Capacity Generation Capacity

Fuel Consumption Heat Rate
2012
MW
GWh
Factor
mmBtu
mmBtu/MWh Rank
561
4,475
91.1%
32,049,649
7.162
398
3,112
89.3%
16,835,687
5.410
107
827
88.2%
9,205,447
11.131
498
3,829
87.7%
26,055,290
6.805
16
4

Total
Total
Average
Total
Average
9,091
65,669
82.4%
468,312,802
7.63
230,819

872,514

43.2%

6,418,167,373

7.36

PERFORMANCE
Combined-cycle Generation:
Table 8
For the first time since 2008, gas-fired
combined-cycle generation decreased in
2013. The total generation of all reporting plants in 2012 was 972,131 GWh vs.
872,514 GWh in 2013.
Natural gas combined-cycle generation decreased from 2012 to 2013 due to
higher natural gas prices throughout the
country, which allowed coal to displace
some of the units, Graeter said.
Like with coal and nuclear plants, to
make this top 20 generating list, units
must be large.
Size matters on this list, Hewson
said. The plants on this list are big and
they run hard.
Seventeen plants on the 2012 list returned in 2013. NextEras West County
plant in Florida kept the No. 1 spot, and
the four units that followed were also the
same with a slight variation in order.
Larger capacity multiple train units
have a distinct advantage, Graeter said.
For info. http://powereng.hotims.com RS#16

1412PE_35 35

12/15/14 11:45 AM

Top 20 Gas-fred Combined-cycle Ranked by Heat Rate (2013)

State

10

Rank

Owner/Operator

Plant

1
2

Harry Allen
Cosumnes

NV
CA

NV Energy
Sacramento Municipal
Utility District
NextEra Energy

FL

1,295

4,550

40.1%

31,060,897

6.827

4
5
6
7
8
9

Calpine
Duke Energy Corp.
Duke Energy Corp.
Southern Co.
CPS Energy
AEP

CA
NC
NC
GA
TX
OH

619
625
1,234
2,739
831
625

1,522
408
8,238
18,130
2,344
2,955

28.1%
7.4%
76.2%
75.6%
32.2%
54.0%

10,410,688
2,796,949
56,548,302
124,736,189
16,159,866
20,476,189

6.839
6.859
6.864
6.880
6.893
6.930

10
11

Tenaska Inc.
Sempra Energy

Cape Canaveral
Next Gen
Russell City
L. V. Sutton
Richmond
Jack McDonough
Rio Nogales
Dresden Energy
Facility
Covert
Palomar

MI
CA

1,233
570

1,909
3,774

17.7%
75.6%

13,234,075
26,321,481

6.932
6.975

12
20

12
13
14
15
16
17
18
19
20

Southern Co.
Puget Sound Energy
WE Energies
Avista Corp.
Oglethorpe Power Corp.
Tenaska Inc.
Calpine
NextEra Energy
Portland General Electric

McIntosh
Goldendale
Port Washington
Coyote Springs II
Chattahoochee
Tenaska Frontier
Metcalf
West County
Port Westward

GA
WA
WI
OR
GA
TX
CA
FL
OR

1,302
282
1,150
305
508
926
597
4,019
392

7,920
1,434
3,351
1,796
2,798
4,615
3,132
21,363
2,384

69.4%
58.1%
33.3%
67.2%
62.9%
56.9%
59.9%
60.7%
69.4%

55,321,095
10,020,434
23,462,253
12,584,738
19,609,365
32,365,780
21,968,567
149,928,868
16,739,458

6.985
6.987
7.002
7.006
7.008
7.013
7.015
7.018
7.022

11
4
7
14
19
15
5
13

Top 20 Heat Rates

EIA Reporting

Capacity Generation Capacity Fuel Consumption Heat Rate

2012
MW
GWh
Factor
mmBtu
mmBtu/MWh Rank
512
3,302
73.6%
22,445,059
6.798
2
498
3,829
87.7%
26,055,290
6.805
6

Total
Total
Average Total
Average
20,262
99,754
55.3%
692,245,543
230,819

872,514

43.2%

6,418,167,373

8
3
9

6.93
7.36

*Excludes co-generating facilities

11

Top 20 Gas Combined Cycle Ranked by NOX Emission Rate (2013)*

Rank Owner/Operator

Plant

Occidental Petroleum

Elk Hills

State
CA

NOX Mass tons Heat Input mmBtu NOX Rate Lb./mmBtu

42

26,321,134

0.00322

GE

Inland Empire

CA

25

11,592,480

0.00430

OUC (Orlando)

Curtis H. Stanton

FL

25

11,280,066

0.00448

Atlantic Power

North Island

CA

2,919,865

0.00463

Public Service Enterprise Group

Linden

NJ

106

44,187,533

0.00482

Sacramento Municipal Utility District

Cosumnes

CA

70

27,289,339

0.00509

Turrlock Irrigation District

Walnut

CA

30

11,582,950

0.00524

Sempra Energy

Palomar

CA

70

26,519,792

0.00525

City of Redding

Redding

CA

1,243,775

0.00530

10

Southern California Edison

Mountainview

CA

107

39,478,078

0.00540

11

Northern California Power Agency

Lodi

CA

23

8,511,144

0.00541

10

12

Burbank Water and Power

Magnolia

CA

23

8,267,773

0.00560

15

13

Florida Municipal Power Agency

Treasure Coast

FL

36

12,735,690

0.00560

14

Pacifc Gas & Electric

Colusa

CA

52

18,163,251

0.00575

11

15

Calpine

Otay Mesa

CA

78

26,313,028

0.00596

14

16

Calpine

Pastoria

CA

105

35,354,434

0.00597

17

South Mississippi Electric Power Asso. Moselle

MS

26

8,663,044

0.00597

18

NRG Energy Inc.

Sunrise

CA

28

9,209,373

0.00599

19

NV Power

Harry Allen

NV

70

23,336,565

0.00603

18

20

La Paloma Generating Co.

La Paloma

CA

142

46,858,702

0.00608

16

Total
Top 20
EPA Reporting
*
36

1412PE_36 36

Total

2012 Rank

Average

1,169

418,933,296

0.00553

67,720

6,984,115,965

0.0194
www.power-eng.com

12/15/14 11:45 AM

Gas-fired Combined-cycle
Capacity Factor: Table 9
The total generating capacity of all
reporting gas-fired combined-cycle
power plants increased from 210,592
MW in 2012 to 230,819 MW in 2013,
yet the utilization of all reporting
plants decreased because of higher gas
prices.

The average NOx

emission for the
top 20 gas-fired
combined cycle
plants was only
0.00553 lbs/mmBtu,
or almost one-fourth
that of all reporting
plants average.
The qualifying capacity factor was
significantly lower in 2013 than 2012:
77.2 percent vs. 84.4 percent.
The lower capacity factor in 2013
could be because smaller plants are
not included in the 2013 data, Graeter
said. Nevertheless, the overall story
still holds true.
Many units on the top 20 list are cogeneration units that sell steam. These
units operate hard because they meet
an industrial need and they have two
income streams, he said.
This list saw a lot of turnover from
2012 to 2013, with only four returning
to the top 20 list in 2013.
Gas-fired Combined-cycle Heat
Rate: Table 10
In past years, there has been much
turnover from year to year in the gasfired combined-cycle heat rate top 20
list.
This year, however, 15 plants from
the 2012 list returned in 2013.
Three brand new plants were added
to the list: NextEras Cape Canaveral
Next Gen, Calpines Russell City and
Duke Energys L V Sutton.

Several plants on the 2013 top 20

heat rate list are fairly new, and most
use the same F class turbine technology, Graeter said.
There is only so much more that
can be done with modern technology,
he said.
These newer plants are more efficient and will be harder to knock off
the list, Hewson said.
What would draw a plant off the list
is not being utilized a lot due to coal
displacement, Hewson said.
Graeter said a large change in heat
rate efficiencies exists between low
and full load, and baseload units increasingly will dominate the list.
Any new fossil-fired power plant,
Hewson said, must have a minimum
efficiency of 8.500 mmBtu/MWh to
meet New Source Review requirements.
The average efficiency of all reporting gas-fired combined-cycle power
plants already meet this requirement,
he said. The EPAs grand plan is that
all these plants will be operating as
baseload and should be even more efficient.
Gas-fired Combined-cycle NOX
Emissions: Table 11
The average NOX emission rate of
all reporting gas-fired combined-cycle
plants in 2013 was 0.0194 lbs/mmBtu.
In contrast, all reporting coal plants
averaged 0.1897 lbs/mmBtu.
Gas-fired combined-cycle plants
are significantly better than coal
plants when it comes to controlling
NOX emissions, Hewson said.
The average NOX emission for the
top 20 gas-fired combined-cycle was
only 0.00553 lbs/mmBtu, or almost
one-fourth that of all reporting plants
average.
All the plants on the top 20 list operate with controlled combustion, and
many have post-control combustion,
Hewson said. Their emission rates are
incredibly low. This is a very exclusive
list.

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ow measurement
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For info. http://powereng.hotims.com RS#16

www.power-eng.com

1412PE_37 37

12/15/14 11:45 AM

STEAM TURBINES

The most common problem with aging coal-fired units

involves erosion of the steam turbines blade path. More
efficient blading will increase the steam output and
improve the units overall heat rate.

efficiency of about 33 percent, according

to the Electric Power Research Institute.
The first step in reducing CO2 is improving the heat rate. Heat rate reduction
is the most cost-effective tool for controlling CO2. According to EPRI, a 1 percent
heat rate reduction effects a 1 percent
reduction in CO2 emissions, or about
40,000 tons a year.
The quest for greater efficiency is often
the catalyst for a steam turbine upgrade.
A number of coal-fired generating
units have been modified to improve
heat rates. Many of these heat rate improvements stem from physical upgrades to steam turbine generators.
According
to
EPRI, such upgrades have led
to heat rate improvements in
the range of 2 to
4 percent.
Although
a
large chunk of U.S. coal-fired generation will be retired amid stricter emission standards for air and water, the
majority of Americas coal-fired generation will survive as power producers spend billions to bring these aging
coal-fired units into compliance with
new and pending emission limits on a
wide range of pollutants.
With the modern design tools, manufacturing practices and sealing practices,
you can redesign the steam path and optimize the HP or IP steam path to gain
an additional 3 to 5 percent in design efficiency, said William Ray, vice president
of Sales Service and Marketing for Mitsubishi Hitachi Power Systems Americas.
If you have additional available steam
flow, you can add that on top of the efficiency gain.

Steam Turbine
Rehabs Improve
Heat Rates

BY RUSSELL RAY, CHIEF EDITOR

he Environmental Protection Agencys (EPA) Clean

Power Plan calls for a 6
percent improvement in
heat rates at coal-fired
power plants. A significant improvement
in heat rate is one of several benefits of
steam turbine rehabilitations.
Under the proposed Clean Power Plan,
each states reduction target for carbon dioxide is based on four building blocks.
One of those building blocks centers on
heat rate improvement, or the fuel efficiency, of coal-fired power plants.
The Clean Power Plan would require
existing power plants to reduce carbon
38

1412PE_38 38

dioxide (CO2) emissions 30 percent below 2005 levels by 2030. Although the
national average would be 30 percent below 2005 levels by 2030, the specific reduction target for each state varies. Under
the proposed rule, the benchmark year
would be 2012, which means any improvements completed during that year
or before will not be recognized.
A plants heat rate depends on its design, its operating conditions and its level
of output. For existing coal-fired power
plants, heat rates range from 9,000 to
11,000 Btu/kWh. A plant with the industry average heat rate of 10,300 Btu/
kwh will operate with an overall plant

www.power-eng.com

12/15/14 11:44 AM

The incentives for upgrading most

steam turbines are longer life, increased
output, greater efficiency, and improved
reliability, including improved solid-particle erosion capability.
When you do these steam path retrofits, youre really making things new
again, Ray said.
To justify the expense, an improvement in performance must be realized.
Any upgrade should focus on optimizing the entire design system, including
balance of plant.
Most of the efficiency gains are
derived from managing the flow in
the turbine, Ray said. The larger the
unit, the greater those advantages are.
A 900-MW unit will see a greater efficiency change than a 250-MW unit.
The most common problem with aging coal-fired units involves erosion of
the steam turbines blade path. More
efficient blading will increase the
steam output and improve the units
overall heat rate.
The heat rate trails the output, Ray
said. When you make a more efficient
HP section, that steam has a lower
energy content. It goes back to the reheater and is going to draw more heat
to get it back up to design reheat temperature. That extra energy absorbed
in the reheat section makes the heat
rate go up.
Steam turbines have many stages
and components. Degradation of each
stage or component affects subsequent
stages and other components. Several
mechanisms cause the degradation of
rotating machines. Fouling is caused
by the adherence of particles to flow
path surfaces. Corrosion is the loss or
deterioration of machine component
material exposed to fluids. Erosion
is the abrasive removal of material
from the flow path by hard or incompressible particles impinging on flow

surfaces. Abrasion is caused when a

rotating surface rubs on a stationary
surface.
One of the things in designing the
new steam paths, especially for an
impulse machine, is that youre able
to manage the solid particle erosion
much better, Ray said. There are
some inherent design changes that go
into it that make it more tolerant to
erosion and therefore makes the steam
path sustain its efficiency over a greater period of time.
The aerodynamic performance of the
steam turbine blade is crucial to achieving acceptable performance. Turbine
manufacturers now provide bowed blade
designs in the name of greater efficiency
and reduced erosion, Ray said.
These designs manage the steam
flow to minimize sidewall losses,

he said. Youre directing more steam

flow into the body of the blade, which
minimizes those losses.
American Electric Powers ultra-super critical plant, John W. Turk, is the
most efficient coal-fired plant in the
U.S with a heat rate of 8,858 Btu/kWh,
according to Peabody Energy. Thats 16
percent lower than the average (10,424
Btu/kWh) for the entire coal fleet in
the U.S.
The next four coal plants with the
best heat rates in the U.S. are: Longview
Power, 9,115 Btu/kWh; Sandy Creek,
9,151 Btu/kWh; Belews Creek, 9,167
Btu/kWh; and James E. Rogers Energy
Complex, 9,174 Btu/kWh.
The top 5 most efficient coal plants
had an average heat rate of 9,120 Btu/
kWh, which is 13 percent better than
the U.S. average.

A 500-MW class low pressure rotor with 40- steel Hitachi last
stage continuous cover blades. Photo courtesy: MD&A Hitachi

www.power-eng.com

1412PE_39 39

39

12/15/14 11:44 AM

COMBINED HEAT AND POWER

A new combined heat and power (CHP) system was

installed at Baltimores Horseshoe Casino earlier this
year. The project featured the Series 4000 CHP system,
which is optimized for natural gas and a diesel-powered Series 1600 emergency backup generator set.
Photo courtesy: Curtis Engine

meet these needs cost effectively, the

house placed its bet on an MTU Onsite
Energy Series 4000 natural gas CHP
system. The Series 4000 CHP system
will support the continuous electricity and climate control demands of
the two-story casino with its output of
1,149 kilowatts of electricity (kWe) and
4,137,000 BTUs of heat per hour. Using
captured heat from the engines jacket
water and exhaust systems, the CHP
is expected to more than double the
overall energy efficiency of the building. As part of a planned expansion,
the CHP, which is piped for the addition of an absorption chiller that will
use the thermal output to
produce cooling, will be
converted into
a trigeneration
system.
To complement the system, MTU
Onsite Energy also provided Horseshoe Casino with a diesel-powered Series 1600 emergency backup generator
set. The end-to-end power solution
sourced and installed by Curtis Engine
& Equipment, MTU Onsite Energys
local Baltimore-area dealer marks
the companys first combined sale
of a diesel backup generator set and
gas-powered Series 4000 CHP in the
United States. MTU Onsite Energy is
a Rolls-Royce brand and is a producer
of diesel- and gas-fueled power generation systems.

Marylands
Newest Casino
Takes a Creative
Approach to
Power

BY CHRISTIAN MUELLER, MTU ONSITE ENERGY

longside
Baltimores
professional
sports
venues and the famed
Inner
Harbor,
the
citys south side has
welcomed Marylands second-largest
casino, the Horseshoe Baltimore. On
August 26, 2014, the $442 million
urban, two-story casino swung open
its doors with much fanfare to unveil a 122,000-square-foot gaming
floor, outdoor entertainment plaza
40

1412PE_40 40

and 20,000-square-foot marketplace

featuring authentic Charm City food
outlets, three premier restaurants and
several bars and lounges. The cityintegrated casino, as its being billed,
was designed to maximize connectivity with surrounding businesses.
Large facilities like the Horseshoe
Casino Baltimore face unique design
challenges and complexities. Casinos
must operate around the clock while
meeting high energy demands. To

CHP TECHNOLOGY
CHP systems are one of todays most
efficient, reliable and cost-effective
approaches to electricity and thermal
www.power-eng.com

12/15/14 11:44 AM

energy generation, providing smart solutions for businesses seeking to control heating, lighting and cooling costs.
CHP is the simultaneous production
of electricity and heat from the same
fuel source. For energy users with high
thermal loads, consistent electric and
thermal energy requirements and
around-the-clock operations, CHP
technology is a desirable solution. In
addition to cost-effectiveness, CHP
systems provide benefits that not only
serve the individual facility of service,
but also reach the communities in
which they operate by offering largescale energy efficiency improvements.
In the typical process of electricity generation, prime movers, such as
reciprocating engines, also generate
large quantities of waste heat. CHPs
capture this waste heat and put it to
use in industrial processes, space heating or absorption chillers, which can
more than double overall energy efficiency, reduce CO2 emissions by up
to 50 percent and decrease primary energy consumption over conventional
power plants by up to 40 percent. This
converts into huge savings for a companys bottom line.
MTU Onsite Energy offers CHP systems in four market clusters biogas,
landfill and wastewater treatment,
natural gas non-CHP and natural gas
CHP. Each has its unique attributes
and applications:
Biogas
Applications represented in this
cluster are those that use anaerobic digesters to produce methane rich biogas
from dairy, livestock and food waste.
The goal is to provide energy from
waste products. Because methane is
a far worse greenhouse gas than CO2,
the emphasis is to reduce the amount
that escapes to the atmosphere by using it in a CHP system. Electricity is
the main energy produced in this applicationeither for self-consumption
or to feed to the grid. Biogas quality is
www.power-eng.com

1412PE_41 41

critical to long unit life, as sulfur content in the fuel must be minimized.
Landfill and Wastewater Treatment
This specialty segment focuses on
converting waste to energy to produce
electricity for self-consumption or

TECHNOLOGY

TO

to feed to the grid. Large amounts of

methane are produced in landfills and
wastewater treatment plants. Instead
of burning this gas in a flare, it can
be used in a CHP system to produce
electricity. Gas quality is critical because the content of the raw material

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12/15/14 11:44 AM

Horseshoe Casino anticipates a savings of approximately $644,000 during production, thanks to the
installation of a new combined head and power (CHP)
system. CHP systems are one of todays most efficient,
reliable and cost-effective approaches to power generation. Photo courtesy: Curtis Engine

used to produce the gas may continually change. Gas composition must be
monitored continuously for methane
and siloxane content to provide quality gas for the module.
Natural Gas Non-CHP
Typical applications include peaking
plants, independent power producers,
industrial facilities and any other requirement for electric power generation.
Through onsite generation, the focus is to produce electricity more costeffectively than purchasing it from the
utility, enabling independence from
the grid.
Electrical efficiency and total lifecycle costs of the CHP system are critical
for the economics of onsite generation.
The mode of operation can be either
42

1412PE_42 42

grid parallel and/or island.

Natural Gas CHP
The most common applications include commercial buildings, industrial facilities, healthcare facilities,
shopping malls, greenhouses, hotels,
condominiums and universities. These
facilities have a significant year-round
demand for heating, cooling and electricity. A CHP system is well suited to
consistently provide for these energy
needs at a more cost-effective rate than
the utility. Total efficiency of a CHP
system can exceed 90 percent in these
applications.

PREPARING FOR A
POWERFUL START
Noise, vibration, location, mounting and temperatures are just a few of

the considerations to be made when

installing a generator set. However,
for Horseshoe Baltimore ensuring the
casino would remain operable during
a utility outage was a top priority. To
guarantee uninterrupted, missioncritical power, the Horseshoe Casinos
CHP plant has the flexibility to run in
two different modes:
Islanded-Mode: In a case where
the utility becomes disconnected, the casinos backup generator
set would provide sole power to
loads.
Black Start: In the absence of power from a utility, such as in the
case of a black out, the CHP can
start quickly with the help of the
casinos backup generator set to
pickup load.
www.power-eng.com

12/15/14 11:44 AM

Strategically coupling the MTU Onsite Energy CHP with

the Series 1600 emergency backup generator set safeguards
Horseshoe Casino and its guests against utility outages
both small and large. After completing installation, the
commissioning phase also met its own distinct challenges.
As a 24/7 industry, the gaming facility welcomes patrons
through its doors at all hours meaning they can never risk
potential interruptions to operations during testing. Because of this, Curtis Engine conducted the commissioning during off-peak hours to minimize impact on normal
building operation.

CHP BENEFITS
CHP systems deliver considerable economic and environmental benefits compared to using conventional utilities to purchase electricity and onsite-generated heat.
Performance and Reliability
According to the Environmental Protection Agency
(EPA), power disruptions can cost casinos more than $1
million a day in lost revenue. Safeguarding against power
reliability concerns is imperative for the high demands of
a casino offering continuous power 24 hours a day, 365
days a year.
CHP systems can also be integrated seamlessly into existing heating and electrical systems, providing a steady
supply of hot or chilled water as well as high quality, continuous power that can stabilize voltage and current sags,
spikes, transients and phase voltage imbalances while allowing a facility to remain operational in the event of a
utility outage.
Energy and Cost Savings
By utilizing heat that would otherwise be wasted from
the production of electricity, CHP systems require less fuel
than separate heat and power systems and can guarantee a
reduction in operating costs, while helping control rising
energy costs. Over the long term, CHP can significantly
reduce energy expenditures that can be applied to the bottom line.
The cost savings CHP systems provide are not just associated with the actual unit. As the benefits of CHP are
realized in the United States, states are increasingly providing incentives to support the use of this technology.
Horseshoe Casino took advantage of Marylands Baltimore
Gas and Electric (BGE) Smart Energy Savers Program. This
program offered the Casino three stages of incentives:
1) Design: $75 per kW
2) Installation: $175 per kW
3) Production: $0.07 per kWh for 18 months
Horseshoe Casino anticipates a savings of approximately $644,000 during the production phase.

CHP IN THE
www.power-eng.com

1412PE_43 43

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12/15/14 11:44 AM

UNITED STATES
In recent years, discussions on CHP
technology have increased steadily, particularly in the United States. However,
this technology is not new or untested. It
has been in use for more than 130 years
and its adoption is on a steady incline.
In 1882, Thomas Edisons first electric
generating plant the Pearl Street Station in New York City used waste
heat from the plants steam engines to
provide heating for nearby buildings. By
supplying both heat and power, Edison
was able to achieve an overall efficiency
of 50 percent.
According to the EPAs Climate Change
Indicators in the United States 2014 report,
At least 16 resort hotels and casinos
with more than 500 rooms in the United
States currently have CHP systems, and
an increasing number of hotels and casinos are choosing CHP systems to meet
their energy needs. The report further
notes that, More than 70 are likely to
meet simple payback on their investment within five years or less.
Rising interest in this energy solution
is partially fueled by an Executive Order
signed by President Obama in 2012 that
called for a national goal of deploying 40 gigawatts of new, cost-effective
industrial CHP in the United States by
the end of 2020. This order has played
a role in the increased adoption of environmentally friendly and cost-cutting
CHP systems by both the private and
public sectors, many through statebased incentive programs like the one
in Maryland. Additionally, an increasing
number of states are now treating CHP
solutions comparably to more widely
known renewable energy technologies.

IS CHP RIGHT FOR YOU?

Modern CHP systems have made it
possible for many facilities like Horseshoe Casino Baltimore to reap the economic and environmental benefits of
the technology. To examine whether a
CHP is the right fit for your facility, first
44

1412PE_44 44

you must start by conducting a financial analysis that typically consists

of two parts. The first part examines
procurement, installation and construction costs, which includes an
analysis of capital expenditures, depreciation and taxes. The second part
examines operating and maintenance
costs, which consists of fuel consumption, and preventive, scheduled and
corrective maintenance compared to
the current (or projected) cost of electricity and heat. The analysis results
are offered in a return on investment
calculation, which provides the net
cash flow to the initial investment
over a number of years. This financial
analysis will reveal whether there is
sufficient payback potential to justify
installing a CHP system. Of course, influences other than financial, such as
environmental impact, may factor into
determining the viability of a project.
Another key to maximizing the
cost effective offerings of a CHP unit
to your facility is understanding the
available state incentives. Be sure to
check the Database of State Incentives
for Renewables & Efficiency (DSIRE)
to access the comprehensive incentives
for energy efficiency and renewable
energy in your area.
Generally, the best applications are
those that use electricity and heat simultaneously, operate for more than
4,000 hours per year and have a suitable gaseous fuel supply. However,
some applications that only aim at
producing electricity, such as landfills
and wastewater treatment facilities, are
also well suited for the technology because the fuel source is virtually free.
Examples of facilities likely to be suitable applications for CHP systems include hospitals, corporate and university campuses, wastewater treatment
plants, industrial facilities and commercial facilities.
Hospitals
Large hospitals and medical centers

need uncompromised electricity and

consistent heating/cooling to ensure
patient safety. Constant power is not
an option, but a literal life-or-death
requirement.
Corporate and University
Campuses
Many campus facilities are already
set up for district heating and cooling,
therefore, CHP systems are a natural
fit to produce electricity and heat.
Wastewater Treatment Plants
A CHP system can be used to produce the electricity needed to operate
pumps and blowers, while the waste
heat from the engine can be used to
warm effluent tanks to speed up bacterial digestion or to dry sludge for disposal.
Industrial Facilities
Facilities with simultaneous needs
for heating and cooling, which include
manufacturing, food processing and
canning/bottling plants, and ethanol
or pulp and paper plants are ideal candidates for CHP technology.
Commercial Facilities
In addition to casinos, large resorts,
hotel complexes, sports clubs, health
clubs, shopping malls and greenhouses can all benefit from CHP systems.
These facilities have consistently highenergy consumption of electricity as
well as heat and cooling.
In addition to providing the most
cost-effective long-term energy solution for various applications, CHP
systems are at the heart of helping
the world meet energy demands by
delivering fuel efficiency and lowering emissions. Alternative sources
like solar and wind power are viable
energy options, but have little impact
on the cost savings. The right balance
of low-cost, environmentally-friendly,
reliable power is what will make the
largest strides toward financially smart
global sustainability and CHP technology is the silent hero that will help
us get there.
www.power-eng.com

12/15/14 11:44 AM

Navigating the
Promises and Pitfalls
of Environmental
Regulations

BY TIM MISER, ASSOCIATE EDITOR

he Environmental Protection Agency (EPA)

has been busy in recent years, and many
of its new rules have

www.power-eng.com

1412PE_45 45

complicated operations within the

power generation industry. No one
will deny that the EPAs ambitions
toward a more pristine environment
represent a fine ideal. Cleaner air and

water benefit everyone. But most in the

power industry will agree that the road
to this cleaner environment makes the
day-to-day operations of power plants
more complex, and that new regulations have the ability to jeopardize
the bottom lines at many plants. The
regulatory path toward cleaner power
is rendered still more treacherous by
the oblique language used in many

45

12/15/14 11:42 AM

rulings, and by the contentious environment in Washington that leads to

frequent legal challenges and revisions
to regulatory statutes. With these issues in mind, here is a brief recap of a
few of the regulations that will affect
power generation in the coming years.

CLEAN AIR REGULATIONS

The EPA has a long history of concern about air pollution. From these
concerns have come multiple rules
designed to cap emissions created by
power plants.
New Source Performance
111(b)
In September 2013, the EPA revised
a proposal from the previous year to
cap carbon emissions from new coal
and natural gas power plants, collectively referred to by the agency as
New Source Performance. The new
standards fall under Section 111B of
the Clean Air Act (CAA), and break
down regulatory standards according
to plant fuel type.
Immediately following startup, new
coal plants can opt to begin using carbon capture and storage technology to
reach a 12-month average emissions
rate of 1,100 pounds of carbon dioxide (CO2) per megawatt-hour (MWh).
Alternatively, they can demonstrate a
7-year average emissions rate of 1,000
to 1,050 pounds of CO2 per MWh.
Emissions standards for natural gas
plants are further broken down according to plant size. New gas plants
with capacities of 100 megawatts
(MW) or greater are required to emit
no more than 1,000 pounds of CO2
per MWh of produced power. New gas
plants with capacities of less than 100
MW are required to emit no more than
1,100 pounds of CO2 per MWh. These
standards are achievable using new
combined-cycle technologies.
Speaking about new regulations,
Todd Palmer, an attorney at Michael
Best Law Firm said, The significant
46

1412PE_46 46

costs associated with the many pend- application of the best system of emising environmental regulations will sion reduction.
Jacob Hollinger, a former EPA lawneed to be spread across a utilitys
load base. The danger is, these same yer currently with the international
regulations might also cause that load law firm McDermott Will & Emery,
base to begin to shrink. Distributed commented, The CPP is the biggest
game in town. Pubgeneration,
imlic comments conprovements in en- The CPP is the
cerning the rule are
ergy efficiency, and
biggest game in
due in December,
stagnation of load
town.
The
Obama
and the Obama
growth will erode
administration is
electricity sales and administration is on
on schedule to fidrive up per-capita
schedule to finalize
nalize the rule by
electricity
costs.
the
rule
by
June
June 2015. We can
As this per-capita
litigation
cost of electric- 2015. We can expect expect
following that date,
ity increases, more
litigation following
but this wont stop
customers will find
that
date,
but
this
the rule from takit advantageous to
ing effect.
further invest in wont stop the rule
According
to
energy efficiency,
from taking effect.
Hollinger,
the
or decouple from
EPAs position althe grid to self- Jacob Hollinger,
lows states to degenerate. This will McDermott Will & Emery
velop their own
leave still fewer rate
payers on the grid to cover mounting standards, and this is a good thing. It
costs, and could potentially create a encourages states to develop control
spiraling effect on rates, which could mechanisms that are out of the box,
further alienate customers and drive and it leaves room for considerable
them down alternative energy paths, flexibility in the execution of the rule,
which would further increase per-cap- he said. If states fail to develop a plan,
ita rates, and so on. These pressures the EPA will impose a Federal Implewill present significant challenges to mentation Plan, or FIP. Hollinger said
the power industry. The stagnant load that burdens under a FIP would fall
growth could also make it more diffi- very differently than they would under
a state-developed plan. This is because
cult to justify new power capacity.
a FIP would place all regulatory presClean Power Plan111(d)
Section 111(D) of the CAA, often sures on generating plants, perhaps rereferred to as the Clean Power Plan quiring them to procure a percentage
(CPP), regulates emissions of existing of their generated power from renewpower plants. The CPP does not pre- able sources, a process that would efscribe emissions reduction measures fectively amount to fuel switching. On
to states, as such. Rather, the rule man- the other hand, a state-implemented
dates that states should develop their plan would be allowed to give considown standards of performance for erable latitude to power generators by
existing power plants, and put into spreading the burden of the rule across
place plans to achieve those stan- not only generation, but also distribudards. The rule defines standards of tion and other areas.
Cross-State Air Pollution
performance as the degree of emisFinalized in July 2011, the Cross
sion limitation achievable through the
www.power-eng.com

12/15/14 11:42 AM

EPA Administrator Gina McCarthy.

State Air Pollution Rule (CSAPR) requires states to significantly improve

air quality by reducing power plant
emissions that contribute to ozone
and/or fine particle pollution in other
states. The rule improves air quality
in the eastern half of the country by
requiring a total of 28 states to reduce
SO2 emissions, annual NO x emissions,
and ozone season NO x emissions in order to attain the 1997 ozone and fine
particle, and the 2006 fine particle National Ambient Air Quality Standards.
In April of this year, the U.S. Supreme Court reversed the D.C. Circuit
opinion that vacated CSAPR. In June,
the government filed a motion with
the U.S. Court of Appeals for the D.C.
Circuit to lift the stay of CSAPR. As
of October, the Court of Appeals has
www.power-eng.com

1412PE_47 47

ordered that the EPAs motion to lift

the stay on CSAPR be granted.
Northeastern states receive a lot
of ozone pollution that is blown in
from upwind states, said Jacob Hollinger. CSAPR is likely to pit upwind
states against downwind states, and
many states believe the rule is still not
enough. For instance, Connecticut
gets 90 percent of its ozone from out of
state. We are likely to see further frustrations resulting from this issue.

CLEAN WATER
REGULATIONS
In recent years, the EPA has placed
greater importance on water quality
regulations, passing rules intended to
mitigate concerns about multiple water
pollutants produced by power plants.

Cooling Water Intake316(d)

Section 316(b) of the Clean Water
Act (CWA) requires the EPA to issue
regulations on the design of structures
used by industrial facilities to intake
large volumes of water from rivers,
lakes, and oceans for the purposes
of cooling their operations. These intake structures were determined to
adversely affect the environment by
pulling large quantities of fish, shellfish, and eggs into a plants cooling
system, where the organisms were injured or killed by heat, physical stress,
or chemicals.
The rule applies to multiple manufacturing facilities and 544 power
plants that withdraw at least two million gallons of water per day and use
at least 25 percent of that water for
47

12/15/14 11:42 AM

In June 2011, the smokestacks of the oil-fired Riviera Beach

power plant were demolished. In their place, Florida Power &
Light built a more efficient plant fueled with cleaner-burning
natural gas. The Riviera Beach Next Generation Clean Energy
Center in Florida began commercial operation in April 2014.
Photo courtesy: Florida Power & Light

cooling purposes. Going into effect in decree that requires the agency to issue
October 2014, the rule requires quali- a revision to its current rules no later
fying facilities to choose one of seven than December 2014.
options to reduce enCoal ash is curMost
in
the
power
trapment of aquatic
rently
considered
life. It also mandates industry will agree
exempt waste under
that facilities that use
the Resource Conthat the road
more than 125 milservation and Recovto
this
cleaner
lion gallons of waery Act (RCRA), but
ter per day conduct environment
some parties have
studies to determine
voiced
concerns
makes the day to
which
site-specific
that coal ash pollucontrols are required day operations of
tion contained in
to reduce the num- power plants more
impoundments and
ber of aquatic life
landfills could leach
complex.
entrained by cooling
into groundwater.
systems.
Additionally, the structural failure
Coal Combustion Residuals
of an impoundment at the Tennessee
A proposed rule to regulate the dis- Valley Authoritys Kingston plant in
posal of coal combustion residuals, of- Harriman, Tennessee, which resulted
ten called coal ash, is currently being in 1 billion gallons of coal ash slurry
considered for implementation by the escaping a 40-acre containment pond,
EPA. In January 2014, the EPA and en- damaging 40 homes, and polluting
vironmental groups reached a consent two rivers, has placed further pressure
48

1412PE_48 48

on the EPA to pass regulations that

would protect against similar disasters
in the future. The proposed rule would
expand the oversight of bottom ash
management and disposal, eliminate
wet ash handling, and phase out surface impoundment ponds within five
years.
Effluent Limitation Guidelines
In April 2013, the EPA proposed
updates to the steam electric power
generation effluent guidelines in a
bid to limit the discharge of polluted
wastewater by power plants. If implemented, the update will represent the
first change in the effluent guidelines
since 1982. The proposed rule would
strengthen existing controls on discharges from power plants and include
limitations on flue gas desulfurization,
fly ash, bottom ash, flue gas mercury
control, landfills, surface impoundments, nonchemical metal cleaning
wastes, and fuel gasification. It would
also set the first federal limits on levels
of toxic metals that can be discharged
in wastewater from power plants.
The agency proposed the rule after it
was discovered that the increased controls on air pollution were resulting in
higher levels of pollution in wastewater. A draft rule was published in June
2013, with the public comment period
closing in September of that year. The
rule was intended to be finalized by
May 2014, but the EPA later reached a
consent decree with an environmental
group to extend the deadline for finalization to September 2015.
www.power-eng.com

12/15/14 11:43 AM

PRODUCTS
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overhead and underground power distribution

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products, announces the offering of Spacer Cable

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system strength, and compact confguration can

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For more information on SLS Sealed Linear Stages

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Automation

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Sensors

AS Inc., a provider of automation software for

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sensor reliability is of paramount importance to en-

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PowerGraphiX promises to revolutionize the way op-

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position feedback within nuclear power plants, LVDT

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Linear Position Sensors can be repackaged with

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VEVA recently announced the launch of its latest

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Macro Sensors offers three series of Nuclear LVDT

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Motion Systems

specifcally designed for position measurement in

high temperature and mild radiation environments

achieved when planning and performing both

new line of ballscrew- and linear-motor-driven

sealed motion stages has been developed by

within nuclear power plants. The HSTAR 750 Series of

routine maintenance and in-plant engineering

Bell-Everman, Inc. SLS Sealed Linear Stages feature

High Temperature, Hermetically Sealed LVDT Position

operations in potentially hazardous plant envi-

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Sensors, for example, is capable of withstanding

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Jan Edvin Pedersen, Vice President of Enterprise

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Asset Management, AVEVA, explained some of the

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www.power-eng.com

1412PE_49 49

these AC-operated sensors ensures a hermetic seal

49

12/15/14 1:56 PM

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biomass, crushed stone, sand,
wood chips and more.
Phone: +1 (610) 544-7200
E-mail: info@terrasource.com

Handling a World of Materials

www.TerraSource.com/PE
Posimetric is a licensed trademark of GE Energy (USA) LLC.
TerraSource Global is a wholly-owned subsidiary of Hillenbrand, Inc.
(NYSE: HI) 2014, TerraSource Global. All rights reserved.

http://powereng.hotims.com RS#300

http://powereng.hotims.com RS#301

http://powereng.hotims.com RS#302

Demolition/Decommissioning

Engineering & Design

Gas Meter Refitting

Brandenburg

Brandenburg is the premier demolition and

environmental remediation contractor for
power plant decommissioning and retrotting. Brandenburg services utility companies
throughout the U.S. by performing demolition and repurposing projects ranging from
selective removal of obsolete equipment
to complete closure of power plant facilities.

Amec Foster Wheeler

designs, delivers and
maintains strategic
and complex assets for
its customers across
the global energy and
related sectors.
connected
excellence in
all we do

POWER PLANT
Demolition, Environmental Remediation,
Decommissioning, Retrofitting

(800) 932-2869 | www.brandenburg.com

Liberty Utilities of New Hampshire wanted a way

to keep their installers safe without compromising the quality of their installations and thats why
they decided to start using Viega MegaPress.
Liberty Utilities are installing Viega MegaPressG
fittings as they change out large volume meters to
rotary meters.
www.viega.us
1-800-976-9819
amecfw.com

http://powereng.hotims.com RS#304

1412PE_50 50

a brand of TerraSource Global

and proven.

With pro-forma 2013 annualized

scope revenues of US$9 billion
and over 40,000 employees
in more than 50 countries, the
company operates across the
clean energy, power generation,
mining, pharma, environment
and infrastructure markets.

50

Crushers

http://powereng.hotims.com RS#305
www.power-eng.com

12/15/14 11:41 AM

Industrial Bolting Systems

Industrial Fitting Systems

SUPPLIERS SHOWCASE |

Since 1968

Industrial Fans

CUSTOM-BUILT
TO YOUR
STANDARDS.
OVER-BUILT
TO OURS.

To schedule a visit, call 724.452.6121

or visit Robinson Fans.com.

www.viega.us
1-800-976-9819

RobinsonFans.com | 724.452.6121

Iso Phase Bus

Material Handling Systems

Power Systems

Solution for Existing &

Evolving Energy Needs
for and in the Americas

Crown Electric

http://powereng.hotims.com RS#308

Iso Phase Bus

Fabrication
Installation
Upgrades & Uprates
GSU Change Outs

NOW

201
513 539-7394 ext.
175 Edison Dr.
Middletown, OH 45044
www.crown-electric.com
sales@crown-electric.com
http://powereng.hotims.com RS#309
www.power-eng.com

1412PE_51 51

www.mhpowersystems.com

http://powereng.hotims.com RS#307

ShowcaSe advertiSing contact Jenna hall: 918-832-9249, Jennah@pennwell.com

If your fan shows signs of wear,

corrosion, abrasion, or unbalance,
its time to call Robinson Fans.

Viega is the only manufacturer to offer press fitting

systems in multiple pipe joining materials. From
process piping to large-scale radiant heating or
cooling, Viega system solutions are safe, secure
and exceed the strictest codes and standards for
multiple applications within the same project.

http://powereng.hotims.com RS#310

http://powereng.hotims.com RS#311
51

12/15/14 11:41 AM

ShowcaSe advertiSing contact Jenna hall: 918-832-9249, Jennah@pennwell.com

| SUPPLIERS SHOWCASE

Recruitment

SO3 Measurement

Scaffolding System

1,500
Employees,
30 Offices
in U.S. &
International
Challenging/rewarding positions
career opportunities and temporary
assignments. Entry to senior-level.
Employee owned. Team focused.
Excellent benets.
Seeking technical professionals from
all engineering disciplines to join our
expanding team of employee owners.
Visit www.enercon.com to search

First IR process photometer for

continuous SO3 measurement in
ppm ranges
Elevated SO3 / H2SO4 concentrations

 

 

an environmental and corrosion
standpoint. Uncontrolled injection of
control reagents wastes money. With
the MCS03, real time control of your
 



specially adapted IR spectral ranges
and the hot/extractive system,









and apply for career opportunities.

Industry Leading Program for the

Design, Estimating & Planning of Scaffold
Brand Energy & Infrastructure Services creates
exceptional value for its clients through
BrandNet, its state of the art scaffold scoping,
estimating, materials management and planning
tool. BrandNet utilizes a computer aided design
approach to typical or non-typical scaffolds,
providing clients 2D and 3D drawings, budgets,
bill of materials, Gantt chart schedules, resource
loading and more.
Visit www.beis.com or email info@beis.com

EO/AA Employer






 



http://powereng.hotims.com RS#312

http://powereng.hotims.com RS#313

http://powereng.hotims.com RS#314

Silo and Bin Cleaning Sevices

Silos, Chimneys, & Steel Stacks

Valves

Superior 




Silo and Bin

Cleaning Services
and Equipment

    

Save space
Arrive on time
Withstand rigorous conditions

Check-All the above

A superior check valve does all the right things. Check-All
spring loaded check valves are assembled to your exact
needs, ensuring absolute precision and reliability. They
work like they should.
Thats what makes Check-All the only choice. Plus, most
lead times are less than one week. All the better.

Call 800-322-6653
or visit
www.molemaster.com
http://powereng.hotims.com RS#315
52

1412PE_52 52

Get me a Check-All.

Manufactured in
West Des Moines, Iowa, USA


 www.checkall.com

 
 

http://powereng.hotims.com RS#316

http://powereng.hotims.com RS#317
www.power-eng.com

12/15/14 11:41 AM

ELIMINATE

Valve Cavitation
x
x
x

Making fundamentals fun

Nick Schroeder, BSME, PE
719 651-7383
Nschroeder48@aol.com
For info. http://powereng.hotims.com RS# 450

Power Generation
Team Leader
Responsible for supervising a
rotating shift of bargaining unit
employees in the operation and
maintenance of steam and
power generation equipment.
United States Sugar Corporation
is one of America's largest
diversified, privately-held
agribusiness firms and is
located in Clewiston, Florida.
For applicants and inquiries, please contact:

Quality and Service Since 1908

Jdooley@ussugar.com
www.ussugar.com

Ring Granulators, Reversible Hammermills,

Double Roll Crushers, Frozen Coal Crackers
for crushing coal, limstone and slag.
1319 Macklind Ave., St. Louis, MO 63110
Ph: (314) 781-6100 / Fax: (314) 781-9209
www.ampulverizer.com / E-Mail: sales@ampulverizer.com

For info. http://powereng.hotims.com RS# 451

For info. http://powereng.hotims.com RS# 454

For info. http://powereng.hotims.com RS# 456

Classified advertising ContaCt Jenna Hall: 918-832-9249, JennaH@pennwell.Com

Eliminate valve cavitation by

placing one or more diffusers
downstream of the valve.
Noise and pipe vibration will
also be eliminated or reduced.
Valves first costs and maintenance burden
will also be
reduced.

UNITED STATES
SUGAR CORPORATION

CLASSIFIEDS |

For hundreds of years navigation was

based on two numbers; latitude and
longitude. Guide your plant to more
efficient operation with five.

Get a thorough mix with:

Pugmill Systems, Inc.

P.O. Box 60
Columbia, TN 38402 USA
Ph: 931-388-0626 Fax: 931-380-0319

www.pugmillsystems.com
For info. http://powereng.hotims.com RS# 452

For info. http://powereng.hotims.com RS# 453

For info. http://powereng.hotims.com RS# 455

1412PE_53 53

12/15/14 11:40 AM

Classified advertising ContaCt Jenna Hall: 918-832-9249, JennaH@pennwell.Com

| CLASSIFIEDS

WE ARE
BUYING!!!

ARE YOU SELLING?

VALVES
INSTRUMENTATION
ELECTRICAL CONTROLS
PROCESS EQUIPMENT
PROCESS CONTROLS
PLANT MACHINERY
PSA SNUBBERS, ETC.

Ferncroft
Management,LLC
VISIT

www.FerncroftManagement.com
email:vavlebuyer@ferncroftmanagement.com

FOR SALE/RENT

24 / 7 EMERGENCY SERVICE
BOILERS
20,000 - 400,000 #/Hr.

RENTAL EQUIPMENT
ESI Boi ler Re nt al s , L L C

DIESEL & TURBINE GENERATORS

50 - 25,000 KW

GEARS & TURBINES

25 - 4000 HP

LARGEST INVENTORIES OF:

Air Pre-Heaters Economizers Deaerators
Pumps Motors Fuel Oil Heating & Pump Sets
Valves Tubes Controls Compressors
Pulverizers Rental Boilers & Generators

847-541-5600

FAX: 847-541-1279

visit www.wabashpower.com

wabash

POWER
EQUIPMENT CO.

444 Carpenter Avenue, Wheeling, IL 60090

For info. http://powereng.hotims.com RS# 460

24/7 On-Call Service

1-800-990-0374

www.rentalboilers.com

- Rental Boilers - Economizers - Deaerator Systems - Water Softener Systems -

For info. http://powereng.hotims.com RS# 463

T. 978-815.6185 Fax. 603-814.1031

LIMITORQUE OPERATORS WANTED

For info. http://powereng.hotims.com RS# 457

Exothermic Engineering, LLC

Burner Management
System Logic Review
Has your Burner Management System
been reviewed for compliance with
current NFPA code?
The Code is revised approximately
every 4 yrs, and our staff of NFPA 85
experts has performed more BMS
reviews than anyone.
Our staff actively maintain seats on key
NFPA 85 technical committees,
averaging over 30 yrs of experience.

Complete BMS Services

 !"
 
   

 !"      


 
 !"   
   
out services
 

 

 


and contract administration
We are also experts at solving ancillary
problems with flame scanners, igniters
and other BMS I/O equipment.

Begin with a conference call

No cost, No obligation.
Call Bill Smith:
Exothermic Engineering, LLC
(816) 415-8888
www.ExoEng.com

For info. http://powereng.hotims.com RS# 461

For info. http://powereng.hotims.com RS# 458

GEORGE H. BODMAN, INC.

CONDENSER OR GENERATOR AIR COOLER TUBE PLUGS

THE CONKLIN SHERMAN COMPANY, INC.

Chemical cleaning advisory services for

boilers and balance of plant systems

Easy to install, saves time and money.

George H. Bodman
Pres / Technical Advisor

P.O. Box 5758

Kingwood, TX 77325-5758
email: blrclgdr@aol.com

Office (281) 359-4006

1-800-286-6069
Fax (281) 359-4225

For info. http://powereng.hotims.com RS# 459

1412PE_54 54

ADJUSTABLE PLUGS - all rubber with brass insert.

Expand it, install it, reverse action for tight fit.
PUSH PULL PLUGS - are all rubber, simply push it in.
Sizes 0.530 O.D. to 2.035 O.D.
Tel: (203) 881-0190
Fax: (203) 881-0178
E-mail: Conklin59@aol.com www.conklin-sherman.com

CONDENSER & HEAT EXCHANGER TOOLS

CLEANERS, PLUGS, BRUSHES

John R Robinson Inc

PH # 800-726-1026

e-mail: sales@johnrrobinsoninc.com

www.johnrrobinsoninc.com

Just Plugging Along

For info. http://powereng.hotims.com RS# 462

For info. http://powereng.hotims.com RS# 464

12/15/14 11:40 AM

Seal-Fast Edge Seal

For info. http://powereng.hotims.com RS# 465

Protect-Fast
Braided Sleeving

For Classified Advertising Rates & Information

Visit us at Booth #950 at

PowerGen 2014 Dec 9-11

Contact Jenna Hall

Phone - 918-832-9249 | Jennah@pennwell.com
Tel: +1(508)229-2000
www.devicetech.com/pg
For info. http://powereng.hotims.com RS# 466

Got jobs?

Classified advertising ContaCt Jenna Hall: 918-832-9249, JennaH@pennwell.Com

 
  

  


    

CLASSIFIEDS |

CRITICAL EQUIPMENT
PROTECTION
SOLUTIONS

Weve got people.

PennEnergy JOBS is the key to attracting the energy industry professionals you need to hire
to meet your business goals. Our process puts your recruitment message in front of the
industrys best talent whether its online, in print, or at an event. This approach offers you the
fexibility to create custom recruitment advertising campaigns best suited to meet your budget
and objectives.
| Learn More |
Visit: www.PennEnergyJOBS.com
Call: 1-800-738-0134

# 464

1412PE_55 55

12/15/14 11:40 AM

INDEX
RS# COMPANY

Areva, Inc.

PG#

19

RS# COMPANY

us.areva.com

14 Clearspan Fabric
Structures

33

www.apollovalves.com

43

1421 S. Sheridan Rd., Tulsa, OK 74112

Phone: 918-835-3161, Fax: 918-831-9834
e-mail: pe@pennwell.com

C2
33

www.spx.com

11 Structural Integrity
Associates

23

www.structint.com/power-eng

35

www.detroitstoker.com

16 Flexim Americas
Corporation

Solvay Chemicals, Inc.

13 SPX

www.cormetech.com

15 Detroit Stoker Co.

17

www.solvair.us

Conbraco Industries, Inc. 5

18 Cormetech, Inc.

SALES OFFICE

www.sicknorthamerica.com

www.ClearSpan.com/ADPWRE

Sick Maihak, Inc.

PG#

17 The Society for

Protective Coatings

41

sspc.org

37
4

Tianjin Valvo Co

www.flexim.com

19 Hilliard Corporation

C3

Hilliardcorp.com

JASC Jansens Aircraft

Systems Controls Inc

Orion Instruments

15

www.victoryenergy.com

11
2

www.jasc-controls.com

Victory Energy
Operations, LLC
WESTINGHOUSE
ELECTRIC CO

orioninstruments.com

10 POWER-GEN 200

21

www.power-eng.com/
power-gen200

12 Power-Gen
International 2015

27

power-gen.com

20 ProEnergy Services LLC

proenergyservices.com

56

1412PE_56 56

C4

Advertisers and advertising agencies assume liability for all contents

(including text representation and illustrations) of advertisements printed, and also assume responsibility for any claims arising therefrom
made against the publisher. It is the
advertisers or agencys responsibility to obtain appropriate releases on
any items or individuals pictured in
the advertisement.

Sr. Vice President North

American Power Group Richard Baker
Reprints Foster Printing Servive
4295 Ohio Street
Michigan City, IN 46360
Phone: 866-879-9144
e-mail: pennwellreprint@fosterprinting.com
National Marketing
Consultant Rick Huntzicker
Palladian Professional Park
3225 Shallowford Rd., Suite 800
Marietta, GA 30062
Phone: 770-578-2688, Fax: 770-578-2690
e-mail: rickh@pennwell.com
AL, AR, DC, FL, GA, KS, KY, LA, MD, MO,
MS, NC, SC, TN, TX, VA, WV
Regional Marketing Consultant Dan Idoine
806 Park Village Drive
Louisville, OH 44641
Phone: 330-875-6581, Fax: 330-875-4462
e-mail: dani@pennwell.com
CT, DE, IL, IN, MA, ME, MI, NH, NJ, NY,
OH, PA, RI, VT, Quebec, New Brunswick,
Nova Scotia, Newfoundland, Ontario
Regional Marketing Consultant Natasha Cole
1455 West Loop South, Suite 400
Houston, Texas 77027
Phone: 713.499.6311; Fax: 713.963.6284
e-mail: natashac@pennwell.com
AK, AZ,CA,CO,HI,IA,MN,MT,ND,NE,NM,NV,
OK,OR,SD,UT,WA,WI,WY,AB,BC,SK, Manitoba,
Northwest Territory, Yukon Territory
European Sales Tom Marler
The Water Tower
Gunpowder Mills
Powdermill Lane
Waltham Abbey, Essex EN9 1BN
United Kingdom
Phone: +44 1992 656 608, Fax: +44 1992 656 700
e-mail: tomm@pennwell.com
Europe and Middle East
Classifieds/Literature Showcase
Account Executive Jenna Hall
1421 S. Sheridan Rd.
Tulsa, OK 74112
Phone: 918-832-9249, Fax: 918-831-9834
email: jennah@pennwell.com

www.power-eng.com

12/15/14 11:40 AM

A Division of THE HILLIARD CORPORATION

For info. http://powereng.hotims.com RS# 19

1412PE_C3 3

12/15/14 11:36 AM

EPC

Overhauls

High Voltage

Component Repairs

Operations & Maintenance

Fabrication Services

Technical Services

Field Services

Stafng

Controls

ProEnergys AeroAdvantage is redefning industry

standards for comprehensive assessments, repairs
and overhauls of aeroderivative turbines.
660.829.5100 | proenergyservices.com

For info. http://powereng.hotims.com RS# 20

1412PE_C4 4

12/15/14 11:36 AM

For the industr y s c areer- minded profe s sionals

WINTER 2014

A Perfect Storm:
Energy Retails
Winter of Discontent
Certification Do You
Get What You Pay For?

TRAINING INSIGHTS:

Five Steps to Find the Best Employees

Before the Big Shift Change
Hiring the Next Generation of
Hourly Oil and Gas Talent

A supplement to PennWell public ations

1411PEJEW_C1 1

w w w.P ennEnerg yJOB S .c om

11/5/14 5:03 PM

1411PEJEW_C2 2

11/5/14 5:03 PM

WINTER 2014
A P E N N W E L L P U B L I C AT I O N

EDITORS LETTER

The Phoenix Issue Hilton Price, PennWell

3 The Perfect Storm: Energy Retails Winter of Discontent

By Michael Hinton

6 Certification Do You Get What You Pay For???

By Michael Powell

TRAINING INSIGHTS

Five Steps to Find the Best Employees Before

the Big Shift Change By Jean Martin

11 Hiring the Next Generation of Hourly Oil and Gas Talent

By Jean Martin and Mark Strong

13

INDUSTRY INSIGHTS

Georgia Power Solves Long-standing problem

of Hardware Failures By Tasha Hardegree

15 5 Top Offshore Oil Companies and Their Future Outlook

17 A Career in Downstream What Do People in
Downstream Businesses Do? By Cheryl McKinney

19 Evidence-Based Management:
a Practical Management Approach

Dorothy Davis Ballard, Content Director

dorothyd@pennwell.com
Hilton Price, Editor
hiltonp@pennwell.com
Kelli Mylchreest, Art Director
kellim@pennwell.com
Daniel Greene, Production Manager
danielg@Pennwell.com
Tommie Grigg,
Audience Development Manager
tommieg@pennwell.com

By Eric Scheller

23

ORGANIZATIONAL INSIGHTS

What the Heck Happened to SEMS? By Dr. Scott Shemwell

www.PennEnergyJOBS.com
Adver tisers
Index

Chevron C2
PennEnergy Jobs 10
PennEnergy Jobs 12
PennEnergy Research Services 14

PennWell Corporation
1421 South Sheridan Road
Tulsa, Oklahoma 74112
918 835 3161
PennWell.com

Recruitment Advertising Sales:

Courtney Noonkester
Sales Manager
918 831 9558
courtneyn@pennwell.com

PennEnergy Jobs C4

1411PEJEW_REV_1 1

11/24/14 5:26 PM

Editor s
Letter

Like the Legend of

the Phoenix

HERE was a moment

when I thought we werent going to do this anymore. The

energy industry is increasingly moving to the digital sphere, and thats no more
exemplary than in the media that covers it. Magazines are being replaced by websites,
and for a moment we thought PennEnergy Jobs Energy Workforce would be making
that same transition. Its worked for other brands in the PennWell family, and although
we were sad to say goodbye to this tried and true format, we were excited for what would
come next.
But not so fast! Just as we were ready to leap fully into an on-demand digital format,
we realized we had too much good content to deny it a place in physical perpetuity.
So, like the Phoenix of legend, the
issue you are reading now rose from
the proverbial ashes and prepared to
take flight again. This may be the
last magazine formatted edition of
PEJEW, but it may not. Were going
to let our audience, not the trends,
dictate whats best.
Speaking of the best, the industry
is constantly searching for the best;
the best talent, the brightest minds, the hardest workers. We look at how to find the best
employees for the big crew change on page 9.
The weather of 2014 wasnt the best, and it played havoc on the energy industry,
especially on the retail side. We look at the effects of this perfect storm on page 3.
How do you become the best? Is there a single path, and can it really be quantified?
We look at the good and bad of certification on page 6.
Whos the best offshore? From the companies ruling the waters today to those who
will be floating above the rest tomorrow, we look at some of the biggest names offshore
on page 15.
How do we do better? Hardware failures can be frustrating, but one company is
solving the problem. We look at how they did it on page 13.
We have to be ready for whats next, while still throwing our best effort at what we do
today. Thats how we can strive to be the best.
Lets get to work!

We have to be ready for whats

next, while still throwing our best
effort at what we do today. Thats
how we can strive to be the best.

Hilton Price

Winter 2014 | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | EnergyWorkforce

1411PEJEW_2 2

11/5/14 5:02 PM

Cover STORY

The Perfect Storm: Energy

Retails Winter of Discontent
By Michael Hinton

N January

31st, Maryland-based
Clean Currents shut its doors
for good.
The renewable energy supplier sent
a minor shockwave through the industry by abruptly announcing it could no
longer serve its 8,000 residential and
business customers. Speaking to journalists about the closure, the company
president said the financials were fine.
None of us suspected that we would be
out of business in a week.
Clean Currents was a casualty of
wholesale price volatility during the Polar Vortex cold snap, which sent temperatures plummeting overnight in early January and massively disrupted life on the
East Coast and Mid-Western states.
Essential infrastructure simply seized
up: flights were cancelled, trains stalled,
schools were closed and white-outs were
common on icy, snow covered highways.
For energy retailers, it was the ultimate
black swan. Already dealing with colder-than-normal fall and winter temperatures, they quickly found themselves in
MICHAEL HINTON is Chief Customer
Officer and Senior Vice President, Products
and Solutions for Allegro Development
Corporation.

a vice-grip of spiking demand, diminished supply and a rapidly degrading operational capability.
PJM Interconnection, the largest US
grid operator, hit a record winter peak use
of 141,500 megawatts just as 20 percent
of its generators went offline due to the
freezing temperatures.
Coal-fired power plants accounted
for roughly half the outages, while diesel generators made up the other half.
There were instances of coal stacks being frozen solid and many diesel generators just wouldnt work in extreme cold.
Pipeline constraints also caused generation problems by driving up natural gas prices east of the Rockies. As the
most popular American heating fuel, utilities relying on gas for generation had to
compete with standard natural gas needs
when the vortex landed.
The wholesale energy market responded accordingly:
PJMs average on-peak power price
jumped from $50 to $278
Henry Hub spot prices spiked from
$3.95 to $8.15 MMBtu
Propane jumped from $2.08 to $4.20 gal.
North Sea Brent Crude spot price averaged $110 bbl for 8 consecutive months
Source: EIA

Out in the cold

On the surface, surging demand for electricity should have meant increased revenues and profits for all. But peak power
isnt always preferred. For electricity retailers with customers on fixed-rate contracts, demand and price volatility bring
risks that can obliterate margins.
Overextended electricity systems
can spell disaster. At the depths of
deep freeze, our customer South Carolina utility SCE&G was forced to implement rolling 15-minute blackouts
to manage demand. Many others were
openly calling on customers to turn
down thermostats or even leave the curtains on South-facing windows open so
sunlight could heat their homes. Most
grid operators in the affected states
were compelled to draw on expensive
demand response resources from other
suppliers, putting further upward pressure on wholesale pricing.
Inadequate hedging against such extreme variability in wholesale pricing left
many retailers financially exposed and
scrambling to pay their bills. When it announced its closure, Clean Currents said
spot market prices during the Polar Vortex went up not by 20 or even 50 percent
some jumped by 500 percent. When

EnergyWorkforce | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | Winter 2014

1411PEJEW_3 3

11/5/14 5:02 PM

Winters of Discontent
Is chaos the new normal? Extreme weather events can
are unanticipated and impossible to plan for
and recent history shows they are

2014

JAN 2014

The Polar Vortex

descends on much
of the US east of
the Rockies

wreak havoc on energy retailers. Black Swan Events

The Ice Storm Cometh

In early 2014, the Polar Vortex descended,
creating the coldest winter in decades
ensnaring many retail energy providers,
whose margins were hammered by flat rate
pricing and inadequate hedging in the face
of weather-related black swan events.

2010

on the rise.
2011

A second
continent-wide
heatwave
strikes most of
North America

JANUARY 20 04

Cold snap hits

Northeast US.
Boston's coldest
day in 114 years

20 0 0

SPRING 2014

Record gas demand leaves huge storage

deficit compared to historical levels
FEBRUARY

Gas & electricity retailer

Clean Currents shuts its doors

20 09

Heatwave hits the

Pacific Northwest

1990

FEB 10

Spurred by spiking gas prices, FERC

raises the cap on power charges that
PJM passes on to third-party suppliers

20 06

A continent-wide heatwave
strikes most of North America

WINTER 1996

The great Midwest cold break.

Temperatures of -60 F in
Minnesota.

JANUARY

NYMEX natural gas futures reach

5-year high
20 01

JAN 31

Heatwave affects
most of Eastern
North America

SUMMER 1995

750+ people die from

heat-related illnesses
during the Chicago
heat wave

Virginia-based Dominion Resources

abruptly exits retail electricity market
JAN 07

20 0 0

On peak power prices spike to nearly

$1000 MWh as Polar Vortex takes hold

Heatwave in the
Southern US

South Carolina utility, SCE&G

implements rolling blackouts after
remote transmitters freeze

AUGUST 1998

JUNE 1998

Power Company of America is forced

into bankruptcy due to unpaid bills

100 F temps drive wholesale

electricity prices in the Midwest
& South to record highs

PJM, the largest grid operator in the

US, sets a new winter peak record at
139,069 megawatts.

JUNE 1998

Polar Vortex descends. temps in

Boston & New York between 11 & 17 F

Peak prices approach $600 per

MWh, more than 10 times normal

JAN 06

Temps in Boston & New York

avg. 37-43 F
JAN 01

New Year's Day. Average on-peak

power prices at PJM stable at CA
$50 MWh

Hedged Against
the Storm
Extreme weather events are now a fact
of life. How can energy retailers predict
future demand and react quickly when
unforeseen events do happen?

Black Swans
& Blackouts

Unprecedented
Heatwaves
By Mid-century

Trade and usage information need to be

aggregated on a single CTRM system

Extreme cold can cause serious

operational degradation, including issues
with natural gas pipelines and mechanical
problems with power generators.

Data models from 21 climate

centers worldwide show
cascading heatwaves in the
US starting as early as 2020.

Big Freeze = Supply Squeeze

Measure usage against past weather
parameters like daily minimum and
maximum temperatures
Propane jumps
from $2.08 to
$4.20 gal.
Solid analytics will turn historical data
into load forecasts for expected monthly,
long-term, short-term hourly and even
sub-hourly demand

Heating oil
inventories in
the Northeast
drop by 6.9
million barrels

North Sea
Brent Crude
spot price
averages
$110 bbl for
8 consecutive
months

Henry Hub
spot prices
spike from
$3.95 to $8.15
MMBtu

October - February
Understand history repeats itself and a
long-term view is needed to react in
real-time

Rise in US average heating days

higher than last year.

SOURCES: BP Energy Outlook 2030, January 2013. The Outlook for Energy, A View to 2040, 2013.

1411PEJEW_4 4

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PJM issued its collateral call the company simply couldnt afford to pay.
And Clean Currents wasnt the only
casualty. Virginia-based Dominion Resources abruptly exited the retail electricity market in January, while Illinois retailer FirstEnergySolutions announced
a coming June surcharge of $5 to $15 for
220,000 of its customers, to pay for spikes
in wholesale power costs during the deep
freeze. Its worth noting that New Jerseys
Systrum Energy lost 5,000 customers in
February when it tried a similar move and
passed on higher energy costs to its nonfixed-rate customers.
In the retail energy sector, unexpected weather and a dynamic book of customers means that the science behind insuring supply can meet demand has to be
nimble, sophisticated and reliable. While
grid operators and large utilities tend to
have robust energy trading and risk management (ETRM) tools in place to mitigate the impact of adverse weather, the
winter of 2014 caught many on the retail
side. With disruptive weather events becoming more frequent and intense, retail
providers need to take immediate steps to
prepare for the next one, and soon.
Extreme & unprecedented.
Welcome to the new normal

Extreme weather didnt start with the Polar Vortex. The eastern seaboard has endured a series of harsh winters and extreme
snowstorms from 2009-2011, including the
February 2010 snowmageddon in Washington that shut down the federal government for the better part of a week.
At the other end of the thermometer, storms mixed with high temperature

blacked out more than 250,000 homes

in the Midwest in early July. A 1998 heat
wave in the mid-west and south drove the
wholesale price of electricity in those states
to record highs, from averages of between
$25 and $40 per megawatt-hour (mwh)
to thousands of dollars per mwh at times
of peak demand. Commonwealth Edison
Chicago at one point paid nearly $4 million for $100,000 worth of power. A 2013
study based on models from 21 climate
centers worldwide says more unprecedented heat waves are expected to hit the US
as early as 2020, according to Nature.
The common feature of these events
is their unpredictability. Weve now had
nearly a decade of news coverage describing cold snaps, heat waves, extreme snowfall and hurricanes as once in a generation and unprecedented. If January
caught you by surprise, you were in good
company. The Climate Prediction Center
(CPC) had actually forecast higher-thannormal temperatures for much of the lower 48 from November to January 2014.
Climatology clearly has its limits. In
energy markets however, information
can literally be power. Better insight into
past and future events holds the promise
of helping energy retailers be more proactive, and build informed strategies to
mitigate the impact of Polar Vortex-level price volatility.
Here are recommendations to help energy retailers prepare for more weather-related market volatility.
To forecast future demand and react quickly when the unforeseeable happens, trade and usage information need to
be aggregated on a single energy trading
and risk management (ETRM) system.

With a solid analytics component, historical data can then be turned quickly
into load forecasts for expected monthly, long-term, short-term, hourly and even
sub-hourly demand.
Once your ETRM system in place,
measuring usage against past weather parameters like daily minimum and maximum temperatures becomes much easier.
Forecasted demand, actual demand and
hourly weather can be displayed or charted in a single view.
These can then be applied to individual trades. By allowing multiple meters to
be assigned to a single retail power contract point, and including counterparty
information associated with each meter,
multiple meter-level demand forecasts can
be aggregated to form the contract-level
demand forecast for a trade.
Finally, you can run various scenarios
to stress demand versus supply and determine if you are within acceptable risk tolerances if not layer in hedges to offset unwanted risk.
Energy retailers will continue to face
events that force them to change their
hedging strategy. In a market where price
hikes can bankrupt you or send customers
fleeing for their incumbent utilities; and
in a regulatory environment where shaky
financial health could mean having your
operating licence pulled by a state monitoring agency, improving the trading and
risk management capability for energy retailers has become mission critical.
The retail sector needs to prepare
for more once in a generation extreme
weather conditions. The winter of 2014
provides a cautionary tale for all of us, despite the lights somehow staying on.

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Certification Do You Get

What You Pay For???
By Michael Powell

N looking

over job descriptions and

requirements in online job boards
or in the print media, we all have
seen the requirement for certification
Six Sigma, Lean Manufacturing, Auditor, Quality Engineer, Purchasing,
Etc... Companies and their hiring
managers have the mindset that certification is the guarantee of the ability
that they are looking for. If you are not
certified in the area of their need, you
are not even considered for the position that they are trying to fill.
Especially in the quest for improving quality and efficiency, reducing
manufacturing costs and waste, the
quality and manufacturing technics
such as six sigma, lean manufacturing,
and other problem solving methodologies, certification seems to be mandatory. But what do you really get when
a piece of paper (certification) is your
benchmark for evaluating a prospective employee.
Unfortunately, experience and performance in past jobs does not seem
to mean much anymore. Certification,

like a college degree, is your learners

permit that must be tempered and built
upon with experience. Without practical hands-on experience, certification
in a methodology does not necessarily
produce substantial positive results.
At a company that I was employed
as a quality engineer at, a corporate level quality manager that had obtained
his six sigma green belt came to my
plant to do a six sigma project to earn

MICHAEL POWELL - Graduate of the University of Houstons School of Technology and

Stephen F Austins School of Business, has been employed by various oil tool manufacturing
companies in Houston, Texas as a manufacturing engineer and a quality engineer over the
past 30+ years.

his black belt. Although I am not

certified in six sigma, I was put on his
six sigma team. The task of his six sigma project was to cut the cost of quality
(scrap & rework). He focused on welding. The six sigma green belt manager would come out from his corporate
office to the plant ever couple of weeks
to lead the team in solving the problem of scrap and rework due to welding. He went over past nonconformity
reports (NCRs) by part number, product line and type of welding trying to
derive the cause for the NCRs. He was
told early on that the welding problems
were systemic. That if the reason for

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the scrap and rework was found for one

part, product line, or type of welding,
the reason for the problem with other
parts, product lines, and types of welding would be found as well. That he
should look at the overall process. This
advice meant nothing to him. Meeting
after meeting he went through his number crunching of all of the elements of
the parts with the highest number of
NCRs by the book that he learned in
his six sigma class.
We were getting nowhere fast. Nothing concrete was coming out of the
meetings. Some team members started
not showing up for his meetings. Some
of us communicated our concern about
the waste of time and no results to the
plant quality director. He was able to get
the plug pulled on the six sigma project and that was the last we saw of the
corporate quality manager.
In spite of his six sigma certification,
this guy had no practical hands-on
experience and no knowledge of welding
processes. He could not see the forest
for the trees so to speak. His six sigma
training and certification had no positive impact on trying to solve the problems with welding. Sometimes to get to
the root cause of a problem, there is no
substitute for getting out in the trenches and putting your ear to the ground.
In my daily walks through the shops
checking on this and that, I would talk
to people, listen, and observe. I am not
a welder, but in my years of being first
a manufacturing engineer and then a
quality engineer, I have watched various welding processes, talked to people who knew more than me, and had
to deal with welding problems.
I had been told that you could tell

the change in the seasons by the fluctuation in NCRs. Welding processes are
sensitive to the environment in which
they are performed in. You can have a
perfect welding procedure, but changes
in humidity will have an adverse effect
on your weld.
One day I was talking to the lead
welding inspector and asked what did
he think was the cause of our problems.
He said that there are some welding

processes that are dirtier than others.

The process that was being used was
not as clean as another that could be
used but it was FASTER. So when the
weld was ultrasonically inspected afterwards, unacceptable indications were
found that rejected the weld. Although
the indications were not found in every
case, and they came in varying degree,
this occurred more often than not. In
which case the weld had to be cut out

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and rewelded. Sometimes the cut out

was so extensive that the large components had to be cut completely apart and
the weld preps remachined. The parts
were so large and bulky that it would
take up to 3 or 4 hours just to sit up and
indicate them in on the large vertical
turning lathes. Unfortunately, the faster
welding process could and in many cases did add addition hours for bad weld
removal, remachining, and rewelding to
an already overloaded shop schedule.
The management mindset was by
push and shove. Each operation in the
manufacturing process was to be done
as fast as possible. Although the faster
welding procedure saved time for the
welding operation of the manufacturing process, it could cost more time
than it gained in rework time.
Both of the real causes for bad welds
(environment and weld process) were
not touched on in the quality managers
six sigma evaluation. He was looking
at every element of the operation as he
learn in the certification training. He
did not have a clue!! He was looking for
band aids to fix the resulting problem.
If going by the numbers (in this case
the six sigma methodology) could get
the job done, then anybody could sit
through the training in the methodology and come up with all of the answers.
Unfortunately, this is not the case in the
real world.
In todays world of dumbed-down
immediate gratification, it seems that
businesses rely more and more on a
cookie-cutter fit out of a text book.
The candidate for a position that has all
of the right certifications is considered

the best candidate. Candidates without

certification are not considered. Managers do not have to think and/or evaluate .. just put the square peg into the
square hole and the desired results will
be obtained .. improved productivity
and profit margins .. or so they think.
Over the past 20 years, quality has
been a growth industry. Careers and fortunes have been made in training and
consulting . ISO 9000 for companies
and six sigma and other methodology
training for individuals. So many times
a company will get their people trained
and certified in a quality/productivity
methodology to show that it is an efficient quality operation . at least on
paper. But the mindset of upper management is often not changed. It has
been papered over with certifications.
The assorted problem solving methodologies originated from the Toyota Quality Team in the auto industry.
They were developed to deliver uniform

results through a standardized process.

But like the old saying about computers,
garbage in garbage out, if experience and a little common sense is not
applied to the uniform process, results
can be somewhat less than desired. Certification does not equate to good effective solutions to problems.
Please do not misunderstand me.
Certification in a problem solving
methodology or job function can be a
handy tool in a persons skills tool box.
But it is not a stand-alone qualification.
A person with experience, an inquisitive
mind, and a desire to accomplish something positive can often out preform a
person with just the certification.
Oh yea . there is another important element that is necessary for any
quality/problem solving methodology
to work. Top management has to understand, believe in, and actively support
the improvement program for it to work
effectively!!!

Winter 2014 | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | EnergyWorkforce

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TRAINING

Insights

Five Steps to Find the

Best Employees Before
the Big Shift Change
By Jean Martin

oil and gas industry is facing a bigger workforce challenge than ever before. The
recent boom has resulted in a widespread labor shortage, the baby boomer generation is near retirement, and
studies have found that the oil and
gas industry is struggling with effective leadership with just one in 20
professionals fitting the profile of an
effective leader today.
The so-called Big Shift Change,
when baby boomers will retire in
droves and leave 500,000 openings
in the oil and gas industry over the
next five years, presents a major risk
for companies as they lose decades of
institutional and industry knowledge.
Compounding the issue further is
the reduced number of students applying for and completing STEM university courses, the complex nature of the
industry, rapid changes in technology and unique safety concerns, which
means that were at a critical point in
time for companies to have robust talent programs to identify and train
high-potential (HiPo) employees.
HE

HiPos are identified by their leadership characteristics, and they are twice
as valuable as their non-HiPo peers
because they save their companies
millions through efficiency, leadership
and longer tenures.
Major U.S. corporations spend
an average of $3 million every year
on leadership and development programs for HiPo employees, often struggle with keeping them with the company -- more than half of will leave
within five years. Our research shows
companies can reduce flight risk and
improve the success of their HiPo pro-

JEAN MARTIN is an executive director and Eugene Burke is the chief scientist and
analytics officer at CEB, the leading member-based research and advisory firm.

grams more than tenfold if they offer

the right kind of training that develops leaders ability to motivate others,
effectively communicate and support
others through change.
Here are five actions consistently taken by successful companies that
result in strong HiPo programs, low
turnover and increased savings that
the oil and gas industry should institute now:
Recognize that employees need
more than strong performance in
their current role to succeed in future
roles. The shortage of leaders in oil
and gas could be explained by the
lack of support and training provided
to those managers who worked their

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way up through the ranks from technical roles. While identifying employees with a record of high performance
is an important step in identifying them
as HiPos, it isnt enough by itself. CEB
research shows that assuming high performance equals high potential puts
the odds at six-to-one that the employee will fail in a development program.
Define potential clearly. While
attributes may vary slightly based on
company culture and practices, there
are three important aspects all companies should look for when defining
potential: employees need to have the
aspiration to rise to a more senior role,
the ability to manage and lead effectively, and commitment to the organization.
Measure potential objectively. Only
one-in-three organizations use assess-

ment data to identify employees for

HiPo programs, and nearly half lack a
methodical process for identifying and
developing HiPos, according to CEB
research. Rather than relying on subjective assessments, nominations or evaluations, successful organizations ensure
fair and valid identification of HiPo talent through scientific assessment.
Ask for commitment in return for
career opportunities. HiPo employees
are highly marketable they are strong
performers and are often confident
they can find work elsewhere. Therefore, organizations that see the highest
returns on their HiPo investments proactively mitigate flight risk among by
asking for future commitment even
career contracts -- in return for development opportunities.

Create differentiated development

experiences. Typical HiPo programs
fail to prepare participants for future
roles. Giving HiPos stretch assignments
goes part of the way -- they not only
learn new skills but also apply existing
skills to different roles but even more,
new learning technologies enable the
most efficient extraction of knowledge
from experience. Getting this blend
exactly right is even more important
as baby boomers retire and oil and gas
companies fill positions from the biggest pool for potential hires today millennials (ages 18-29 years). As many as
23 percent of millennials say they value
diverse experiences more than advancement and they place particular emphasis on development opportunities when
looking for jobs.

Books, Books
So Many Books
PennEnergy.com is your best source
for the largest and most comprehensive
compilation of books related to the
energy industry.
Oil & Gas
Power Systems
Renewable Energy
Business Management
Mechanical & Chemical Engineering

Check out over 50,000 energy industry titles at

www.PennEnergy.com

10

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1411PEJEW_10 10

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TRAINING

Insights

Hiring the Next Generation

of Hourly Oil and Gas Talent
By Jean Martin and Mark Strong, CEB

everyone is aware that

surging North American production coupled with a wave of
retirements is causing an unprecedented
shortage of talent across oil and gas companies. Increased production in North
America is expected to create 500,000
to 1 million new energy-related jobs in
the next 10 years. Yet, with an improving economy and rebounding 401k accounts, hourly employees of retirementage are more confident about retiring
than they were a few years ago. These
employees have been operating and repairing equipment and machinery for
decades, and will take their institutional
knowledge with them when they go.
CEB has analyzed operations and
maintenance jobs in the worlds leading oil and gas companies and finds
that to replace experienced, successful workers, companies must find candidates with a set of fundamental skills
and abilities:
Dependability and reliability
Safety orientation
Teamwork orientation
Learning ability
Troubleshooting and problem
solving
Mechanical aptitude
Online, pre-employment assessments
EARLY

allow companies to identify candidates

with these characteristics during the
application stage with greater accuracy than a resume or interview will
elicit. As oil and gas companies compete for talent, using assessments can
help them broaden their talent pool,
reduce safety concerns and hire the
right people.
Reach into unconventional
areas for talent

Hiring a refinery operator from a competitor or an instrument technician

from a contractor is fairly easy, and
most of these individuals already have
the necessary skills. However, when
bringing in candidates from unconventional sources, companies must determine if they have the fundamental
skills and abilities suited for these roles.
For instance, a hospital lab techni-

cian follows procedures, is dependable

and may have experience with shift
work. Online assessments can test for
the compatible characteristics before
a recruiter reviews a resume or schedules an interview. Once those characteristics are assured, companies need to
design compelling employment offers
for non-traditional talent pools. Without that, it will be harder to pull top talent from other industries.
Emphasize safety

The drive to fill vacancies quickly can

put peoples lives and businesses at risk.
The energy industry has some of the
most extensive safety training in the
world, but the best companies start
focusing on safety at the hiring stage.
Our research shows that a small group
of high-risk employees account for a
large share of accidents and injuries,

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1411PEJEW_11 11

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even after undergoing safety training.

An oil and gas services company we
work with implemented a safety assessment in their hiring process and realized a 28 percent reduction in at-fault
accidents and incidents after screening
out candidates with the lowest safety orientation scores. In addition to improvements in employee safety and wellbeing, the cost savings associated with
accident reduction was over five times
the cost of implementing assessments as
part of the hiring process. Also, as safe
individuals tend to be more dependable, the company found that the rate of
failures in their drug screens and background checks was reduced as well.

Selectively hire the right people

Hiring mistakes happen such as those

who do not show up to work after their
first paycheck, tend to cause conflicts
with others in the workplace, or simply cannot learn the procedures and
requirements of the role. These hires
greatly affect productivity and usually
have short tenure.
By using online assessments, individuals suitability for roles can be measured and determined these types of
hires can be screened out of the interview process, allowing recruiters and
hiring managers to focus their time
and effort on the candidates most likely to be successful. In fact, organizations

that use assessments early in the hiring

process see a 30 percent reduction in
unqualified candidates in the interview,
an 89 percent reduction in overall time
in the selection process and a 55 percent
reduction in cost per applicant.
Almost all companies will feel pressure to hire new employees as rapidly
as possible. Although it seems counterintuitive to utilize assessments to screen
out candidates during a talent shortage,
valid and appropriate selection assessments can speed the hiring process by
focusing time and effort on only qualified candidates, rather than wasting time
on those who have little chance to be
successful.

Got jobs?
Weve got people.

PennEnergy JOBS is the key to attracting the energy industry professionals you need to hire
to meet your business goals. Our process puts your recruitment message in front of the
industrys best talent whether its online, in print, or at an event. This approach offers you the
fexibility to create custom recruitment advertising campaigns best suited to meet your budget
and objectives.
| Learn More |
Visit: www.PennEnergyJOBS.com
Call: 1-800-738-0134

12

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1411PEJEW_12 12

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INDUSTRY

Insights

Transmission Staff Specialist

Invents Bushing
Georgia Power solves the long-standing
problem of hardware failures.
By Tasha Hardegree, Georgia Power

transmission lines have

had hardware failures due
to wind-induced vibrations.
Over extended periods of time, the
wind-driven rubbing between line insulator hardware and the associated
cross arm attachment points can cause
total failure of the cross arm at the
point of attachment. These vibrations
cause wear between the metal components on the transmission line hardware. In some cases, this could result
in line failure or multiple arm replacements, which can be very expensive.
In many cases, over time, the clevis pin can completely erode through
the attachment of the arm. If the hole
is not repaired after it becomes worn, it
may deteriorate to the point that it may
no longer be able to support the weight
of a conductor. In these situations, conventional methods may require replacing the entire arm.
In the past, some transmission crews
used a helicopter with stabilizers and
ANY

other specialized equipment to inspect

the hardware, and to focus in on the
attachment points. This task was complex, time consuming, expensive and
labor intensive and diverted crews from
doing other work when the arm attachments needed to be replaced due to
these types of failures.
To solve this problem; Georgia
Power was challenged to find a solution to eliminate the wear due to
wind-driven sawing action. With this
concept in mind, Buddy Phillips, a
maintenance and reliability staff specialist took the challenge given, and
went straight to work. Over his career
with Georgia Power, Phillips had recognized other business solutions and
within a matter of weeks, and several
prototypes later, he built a prototype
that was stronger than then his other
designs. What Phillips developed was
a cost-effective repair process that was
easy, simple and fast and a solution for
a longstanding problem Georgia Pow-

BUDDY PHILLIPS is a line specialist for Georgia Power, in the Maintenance & Reliability
Department, has been with the company for 42 years, and is responsible for line maintenance
including: inspection of new line construction, steel structure repairs, evaluation of hardware
failures, helicopter inspections. He is also responsible for Transmission lines in Georgia and
live line training.

er was having with their transmission

line hardware failures.
Installing the device

Linemen use this device by inserting the stainless steel bushing into the
attachment hole in the arm. Because
the attachment is made of a corrosion-resistant stainless steel, the workers no longer need to replace the entire
arm. As a result, it improves reliability and extends hardware life and has
also saved a significant amount of money in transmission and distribution
line repairs, and because of its success,
Georgia Power plans on installing the

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1411PEJEW_13 13

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bushings to prevent the wear on new

construction and to eliminate the failure due to wind induced vibrations.
The stainless steel bushing can not
only be used for electric power transmission and distribution systems, but
can also be used anywhere a hole or
aperture needs to be repaired or reinforced. The new bushing was tested,
and not only solved the wear problem,
but also increased the strength of the
clevis attachment significantly.
Providing key benefits

The attachment bushing also provides

several key business benefits such as

safety, overall cost reduction, improved

operational efficiency, enhanced reliability, and risk mitigation.
Georgia Powers field workforce has
installed a number of these bushings on
230kv lines throughout its service territory to prevent arm replacements due to
failures from wind induced vibrations
on hundreds of worn cross arms. There
is minimal training required and the
savings on this one project alone were
calculated and shown to be significant
in labor, equipment and materials.
Due to the successful benefits of this
innovative solution, Georgia Power was
granted a patent from the United States

Patent and Trademark Office, and in

honor of its inventor, Georgia Power
employees have informally nicknamed
the product The Buddy Bushing. The
trademarked product is also being sold
and distributed by Diversified Products, which has worked with linemen to
bring their inventions to market for the
past 15 years.

Companies Mentioned:
Diversified Products
www.diversifiedproducts.com

Georgia Power
www.georgiapower.com

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GIS Data for the Energy Industry

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INDUSTRY

Insights

5 Top Offshore Oil Companies

and their Future Outlook

LUNGING into the deepest depths

of the sea, energy companies are
constantly searching for new oil
and gas resources to meet the global
populations growing demand for energy. New technologies for deep water
drilling are allowing companies to push
the limits of oil exploration and give operators the power to unlock reserves 500
feet or more below the surface. Some of
the biggest discoveries in the world are
located in offshore fields like the Libra
oil field off the coast of Brazilestimated
to contain up to 12 billion barrels of oil.
Here are five companies that could
continue their dominance in offshore
development now and in the future:

1. Shell

Shell has been a pioneer in offshore

oil development with the company
announcing it would stay on target to
create the deepest offshore oil and gas
production project in the world last
year. The Dutch firm said it would
make an offshore oil platform in the
Gulf of Mexico that would produce
almost 2 miles down the surface.
The Gulf of Mexico is becoming
a hotbed of offshore oil and gas development after the Mexican government opened up its energy sector to foreign investors. The region is already
equipped with an extensive pipeline

infrastructure system with companies

such as Shell contemplating adding
pipe to account for growth in offshore
oil. Shell produced 3.2 million barrels
of oil equivalent per day in 2013 with
sales of liquefied natural gas sales reaching 19.6 million tons. However, the
company reported a drop in revenue
from the previous year with net cash
flow decreasing to $40 billion from $46
billion in 2012.
Shell said it aims to work on delivering new projects, highlighting its projects off the coast of Mexico and Brazil. Looking to the future, Shell said its
Mars fielddiscovered by the firm in
1989in the Gulf of Mexico started production in February this year and will
reach a peak production of 100,000 barrels of oil equivalent per day in 2050.
The company also signed a productionsharing contract for the Libra oil field.
2. Statoil AS

Based in Norway, Statoil is a major energy producer with 40 years of oil and gas
production experience on Norwegian
waters. Statoilsaid it had more than $26
billion in adjusted earnings and $25 billion in net operating income for 2013.
The company previously announced it
added 1.25 billion barrels of oil equivalent from exploration, recently achieving its highest organic reserve replace-

ment ratio with 1.47 last year.

Statoil projects include the Oseberg
East field, an offshore oil field in the
North Sea, which has 41.5 million barrels of recoverable oil, according to Norwegian Petroleum Directorate. Recently, ExxonMobil and Statoil announced
a major offshore discovery in the Piri
prospect in offshore Tanzaniawhere
Statoil has been operating since 2007.
The company is banking on the profitability of emerging technologies, saying new innovations will be critical in
keeping the companys costs low. Statoil
said it is considering producing a subsea
compressor that could increase its natural gas production and reduce the impact
of its operations on the environment.
3. Chevron

In Chevrons 2013 annual report, the

company headquartered in California said it earned $21.4 billion in sales,
increasing its annual dividend payout to
stockholders for the 26th-straight year.
The company said it added an estimated 800 million barrels of net oil equivalent proved reserves with projects last
year. Chevron aims to increase production with a capital and exploratory budget of almost $40 billion in 2014, focusing on core areas as well as building new
legacy positions in the upstream market.
This year, the company has several

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big-budget projects. Chevron boasts 15

projects that will receive more than $1
billion each in investment, such as the
deepwater projects Jack/St. Malo and Big
Foot in the Gulf of Mexico. The Jack/St.
Malo project is expected to yield 170,000
barrels per day of oil and 42.5 million
cubic feet per day of natural gas from 43
subsea wells once it is fully operational.
4. ExxonMobil

As a truly international firm, ExxonMobil

has oil and natural gas operations in six
continents. The Houston-based company
earned $32.6 billion for 2013, ending the
year with a peak of $42.5 billion in capital and exploration expenditures. While
the company said its capital spending will
decrease to $39.8 billion in 2014, ExxonMobil plans on diversifying its portfolio with 10 new projects this year that are
forecasted to add about 300,000 net oil
equivalent barrels per day.
In 2013, the company listed proved
reserves at 25.2 billion oil equivalent barrels and has more than 120 projects that
are expected to develop 24 billion oil
equivalent barrels of oil and natural gas.
ExxonMobils long-term investments
include the Cravo, Lirio, Orquidea and
Violeta (CLOV) offshore fields in Angola, which are located between 3,600 feet
or 4,593 feet below the sea. The project
is projected to have a production capacity
of 160,000 barrels of oil per day after the
company confirmed the CLOV project is
on schedule. ExxonMobil has also started
work on a $4 billion project to develop the
Julia oilfield in the Gulf of Mexico.
5. ConocoPhillips

As the worlds largest independent exploration and production company, Cono-

16

coPhillips is quickly making a name for

itself outside of Texas with operations
and activities in 27 countries. The company reported $9.2 billion in earnings for
2013 and has made breakthroughs in its
exploration program, predicting it will
grow its exploration operations in 2014.
Since the company began drilling
in the deep waters of the Gulf of Mexico starting in the 1980s, the company
has interest in 454 deepwaterblocks in
the region, which span about 2.2 million
net acres. The company has tested out
emerging drilling technologies in Magnolia, formerly the worlds deepest tension-leg platform in the Gulf of Mexico and is expected to make an impact
in the region. In an auction fordrilling
rights in the western Gulf of Mexico last
year, the company submitted the highest
bid.ConocoPhillipshad the largest total
of bids with $50.3 million, topping Chevrons $32.8 million. In addition to winning the bid for drilling rights, thecompany alsorevealed its fourth deepwater
discovery in the Gulf of Mexico in the
same year. The Gila discovery was made
under approximately 4,900 feet of water.
Outside of the Gulf of Mexico, the
company said it has exploration activities
in Australia and Senegal. ConocoPhillips said it plans on expanding its asset
portfolio and deliver 3 to 5 percent compound annual production growth.
Sources
http://online.wsj.com/news/articles/SB10001
424052702303442004579123560225082786
http://www.bloomberg.com/news/2013-1011/brazil-sweetens-libra-oil-field-sale-termsto-lure-bids.html

Shell
http://reports.shell.com/annualreport/2013/servicepages/downloads/files/

entire_shell_ar13.pdf
http://www.reuters.com/article/2013/05/08/
shell-gom-stones-idUSL2N0DP1I420130508
http://www.shell.com/global/aboutshell/
major-projects-2/mars-b.html

Statoil
http://www.statoil.com/en/investorcentre/annualreport/annualreport2013/pages/
default.aspx?redirectShortUrl=http%3a%2f%
2fwww.statoil.com%2f2013
http://www.statoil.com/en/NewsAndMedia/
News/2014/Pages/IORJune2014.aspx
http://www.reuters.com/article/2014/07/03/
statoil-oil-idUSWEB00P7E20140703
http://www.statoil.com/en/InvestorCentre/
AnnualReport/AnnualReport2013/Pages/
CEOletter2013.aspx
http://www.statoil.com/en/InvestorCentre/
QuarterlyResults/2013/Downloads/Financial%20statements%20and%20review%20
4Q%202013.pdf

Chevron
http://www.chevron.com/annualreport/2013/
documents/pdf/Chevron2013AnnualReport.pdf

ExxonMobil
http://news.exxonmobil.com/press-release/
exxon-mobil-corporation-announces-estimated-fourth-quarter-2013-results
http://news.exxonmobil.com/press-release/
exxonmobil-oil-production-increase-timestartup-clov-project
http://www.offshoreenergytoday.com/exxonmobil-10-new-projects-to-come-in-production-in-2014/

ConocoPhillips
http://www.reuters.com/article/2013/08/28/
us-usa-oil-offshore-idUSBRE97R0ZT20130828
http://www.conocophillips.com/
investor-relations/Company%20
Reports/2013_Annual_Report_CR.pdf
http://www.businesswire.com/news/
home/20131218005644/en/ConocoPhillipsAnnounces-Fourth-Oil-Discovery-Deepwater-Gulf#.U8mOooBdXXE
http://www.conocophillips.com/what-we-do/
producing-energy/oil-and-gas/offshore/Pages/going-deep-in-the-gulf-of-mexico.aspx

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INDUSTRY

Insights

A Career in Downstream
What do People in
Downstream Businesses do?
By Cheryl McKinney, EOR Strategy and Commercial Business Leader, BP

downstream oil and gas industry is leading the way in providing exciting career opportunities for talented engineers around the
globe. Our industry is critical to the oil
and gas value chain. We refine, manufacture and market fuels, lubricants
and petrochemicals for both industrial
and retail consumers. This is our fundamental purpose.
HE

How the industry is developing

The downstream industry has certainly developed since I joined in the

mid-1980s. Nowadays, careers in this
segment of the industry offer exciting
opportunities to produce leading products via revolutionary technology and
processes. The downstream industry
is investing across the world, pushing
the use of technology to produce fuels
and lubricants more efficiently, despite
the ever more difficult feedstocks now
being produced from todays oil and
gas fields.
In the US Midwest, we at BP have
redeveloped the Whiting Refinery, to
supply fuel to the North American markets. The multi-billion dollar upgrade
of the facility has just been complet-

ed to ensure that it can

process growing supplies of North American crude oil, including
heavy oil from Canada.
At Whiting we will now
process up to 413,000
barrels per day and produce enough fuel every
day to run 430,000
cars, 22,000 commercial trucks, 2,000 commercial aircraft, 10,000 tractors and fill
350,000 propane tanks. This upgrade
work has required industry leading talent and ingenuity of process, to ensure
that the refinery can work with the
more challenging feedstock, while having a minimal environmental impact.
Pushing the boundaries

Many misconceptions exist about what

a job in downstream actually entails.
I believe that we offer a wide range of
roles, in a variety of exciting operating
environments. It is not all oily overalls
and heavy machinery; technical and
business staff in downstream have the
opportunity to work with industry-leading refining technology and experts

within the field.

At Whiting, we have
recently engineered a
way to run the refinerys gasoline-making
units even during the
planned maintenance of
other parts of the refinery. This first for BP has
ensured that production
can be maintained during downtime and is a
great example of our engineers collaborative workingtaking an initial idea
all the way through to its implementation. It required rigorous analysis and
thinking to ensure that consequences were fully thought through and all
possible outcomes were taken into
consideration.
At our Hull petrochemicals plant in
the UK, we are leading the way in the
research of new product streams that
will help to form the fuels of the future.
We also manufacture acetic acid and
acetic anhydride, which are used in
textile and plastic manufacturing, as
well as in the pharmaceutical industry and to create bleaches. We produce
half a million tonnes of acetic acid per

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year, making the facility the

only large scale producer in
Europe. Hull is also home
to one of BPs main global
research and technology centres at which we have created a range of technologies for
BPs global businesses.
To meet these global challenges, we increasingly rely
on a diverse workforce of men
and women from around the
globe. The varying perspectives of the people in our
downstream business allow
us to examine issues from
multiple angles and develop
ideas and technologies that
ensure products are available
to deliver energy to the world in safe and
environmentally sound ways.
The downstream lifestyle

I often hear from our downstream engineers that they enjoy working in the
office environment, while still appreciating the opportunity to work with the
operational teams in the facilities. The
teams are made up of highly skilled
engineers and technicians, responsible for designing and developing plant
in a complex environment. Being located at a refinery or petrochemicals plant
allows employees to identify issues,
implement changes and examine ideas
and outcomes in a real world environment. These teams take things from the
hypothetical to reality and get to see the
tangible outcomes of their efforts.
While some roles may offer the
potential for significant international travel, the majority of roles are loca-

18

tion specific, with facilities often located near major consumption areas close
to major cities, which in turn provides a
stable work/ life balance.
What can recruits expect?

Downstream facilities are complex manufacturing sites with numerous functions all operating in unison. Therefore
roles in downstream are often suited to
inquisitive candidates, who tend to push
the boundaries in their thinking and
approach. Collaborative team players
suit this environment and can expect to
find an inclusive culture that encourages innovative thinking.
Downstream engineers are responsible for delivering often large-scale engineering projects and ensuring the safe
operation of the companys plants. BP,
in turn, provides compelling packages
and extensive learning opportunities in
the classroom and on the job. Through

these offerings and the diversity of roles

on offer, recruits can expect significant
career development opportunities.
I believe the sector to be extremely
flexible and adaptable to personal priorities and needs. At BP I have found that
our employees priorities change as they
move through their careers. The scale
of the industrys major downstream sites
allow for progression and development
within a single site or location, while the
reach of the sector means that the global
opportunities are there as and when the
time is right.
In summary, recruits can expect an
industry with numerous career options
and the flexibility to meet their short
and long term goals. This is an industry sector that challenges you and the
way you think, that is inclusive and
that delivers vital products to keep the
worlds light on, homes warm, businesses running and vehicles moving.

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INDUSTRY

Insights

Evidence-Based Management:
a Practical Management
Approach for the Energy Industry
By Eric Scheller, Director at Sapient Global Markets

HE rapid growth over the last five

years of natural gas, gas liquids

and crude oil activity in shale
basins has single-handedly changed
the global nature of energy production. The impact on companies in the
upstream, midstream and downstream
sectors is seen in increased competition for supply and markets as well as
human and financial capital. Complicating ongoing business management
is the large amount of data from sprawling assets that needs to be analyzed and
acted upon in a narrow real-time window through a compelling format. In
this article, Eric Scheller discusses the
challenges and options facing business
directors as they try to fully disseminate
and leverage data in the management
and growth of their businesses.
Trends Driving Increased Complexity

When Mitchell Energy completed its

first economic shale fracture in 1998,
no one thought it would lead to the

Photo by Rachel Seeley, UOGR

unprecedented shifts in energy markets that we are experiencing today.

In fact, there were many experts who
did not see the development of these
unconventional plays and now believe
that North American shale development is still in its early stages. Consider
how much shale plays have moved the

ERIC SCHELLER is subject matter expert within Sapient Global Markets Midstream
practice. He has over 25 years of experience in oil, gas, NGLs and chemicals. His practice
areas include business and asset operations strategy, development and business in distress
and corporate restructurings as well as commodity marketing and trading. He has served in
a variety of business development, consulting, commercial, operations and technical roles for
several major companies.

North American energy landscape over

the last five years:
Record production increases in natural gas and oil
Prolific NGL production from liquidrich gas processing
Historical build out of midstream
infrastructure
Revitalized North American petrochemical industry
Its clear that upstream producers,
midstream and downstream companies
have had their share of growing pains
in dealing with the increase in inter-

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connected assets to handle the technological advances and growing production volumes. This growth has spurred
business management complexity as
well as the amount of data to be analyzed to assess performance, which ultimately reduced available time to examine and seize opportunities. Throughout
this growth, companies recognized the
need to collect, validate, compartmentalize and digitize data into electronic data

Safety and environment

Regulatory
Commercial

Business
Operating assets
Supply chain

management systems, asset management

data warehouses and commercial systems to assess and monitor their investments. In spite of these investments and
efforts, companies found themselves with
portfolios of assets generating marginal
returns. Performance reviews by business
managers found that one of the underlying contributors of poor performance was
that market signals went unidentified as a
result of marginal data analytics.

Control

Operate

Extend

Optimize

Ongoing operations
Turnarounds
Customers

Assets
Capacity
Portfolio

Control - Activities tied to the control aspect for the base drivers of the business.

Focus: Safety and environment compliance, regulatory standards and compliance,

commercial and legal agreement management

Goal : All the processes necessary to operate the business assets are in place and
are valid to invoice and report against
Operate - Activities related to the physical operation of assets under management.

Focus: Ongoing operations, business-in-distress turnarounds, customer management

Goal : Business assets are operated safely, prudently and effciently
Optimize - Portfolios of assets are optimized to realize the highest returns.

Focus: Assets, capacity and portfolio management

Goal : Achieve the highest returns possible at the commensurate level of risk
Extend - Lever aging strategies and positions to grow business results Into new areas.

Focus: Organic business growth, business and operating asset acquisition,

supply chain extension

Goal : Achieve business development and growth goals to achieve a competitive advantage
FIGURE 1: Parsing the Business into its Core Functional Activities Focuses Attention
on Key Business Elements.

20

Base Data Requirements To

Capture Opportunities

The struggle for many companies is

determining how to fully disseminate
and leverage data and analytics in support of corporate goals tied to safety,
environment, health, customer, service
and profit and expense targets. Energy
firms share many of the same goals, for
example:
Be recognized by the public and
industry as a safe and responsible operator of assets as demonstrated through
a track record supported by audit history of a reliabilitycentered asset management practice that fully complies
with industry regulations
Minimize the total cost of asset ownership through the efficient use of personnel and a shared services support
model
Maximize the utilization of assets
under management to increase topline and bottom-line growth
Maximize optionality and flexibility
through asset interconnectivity
Maximize earnings from integration
of newly acquired assets or flexibility
in operating the asset
Capitalize on low-risk market opportunities by leveraging assets to flow
hydrocarbon to premium markets
Leverage returns through volatility in
commodity differentials supporting
arbitrage strategy development
Companies trying to achieve wideranging goals as shown above will have
to create a data and workflow framework
with the following characteristics:
Accurate and TimelyData sourced
across the organization is the driver of
solid analytics. Without accurate, up-to-

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the-minute data, companies are unable

to discern and communicate possible
market signals to decision makers. Data
must be error free, undisputed and freely
available before any meaningful insights
can be gleaned through analytics.
Cross Functionally AvailableCompanies that extend quality data and analytics to remote locations and employees
across functional silos create an open,
collaborative working environment that
encourages data cross-flows. These new
flow-paths improve the quality of informationdriven analytics and systems.
Organizationally ActionableDecision makers receive a continuous position of actions to improve asset performance and enhance business expansion
investments from the rollup of organizationally available data and analytics,
including up-to-date information on
customers, products, product availability
and operations status.
An Evidence-based Approach

Business directors in the energy space

have long faced the challenge of direct-

ing complex systems with

limited resources and
disparate data systems
to achieve a laundry list
of goals and objectives.
Many ambitious overarching initiatives to fully
disseminate and leverage
data fall short of achieving
any meaningful, actionable output because they
fail to make managing the
business faster, more efficient and more profitable.
Any plan that fails to take
into account these three
drivers hampers its chances of success
from the moment it is proposed.
In order to maximize their chances for success, business directors are
embracing Evidence-based Management (EBM) to employ actual evidence in management and decisionmaking. Leveraging well-developed
methods long used in the medical field,
directors in the energy sector are apply-

Goal, Control Pipeline

Integrity Management
Requirement: Asset management,
integrity and compliance reporting
Actionable Output:
Assetleakdetectionoccurrencesandnon-destructiveinspection
dataanalysis
Managementofpredictive/preventativemaintenanceanalysis.
planningandassetperformance/
integrityreporting
FIGURE 2:PipelineIntegrityManagement
ComplianceandActionableActivities

Goal: Operate Multi-Mode

Transport Services and Terminals
Requirement: Capacity
management tracking
and reporting
Actionable Output:
Summarizelogisticssolutionsandsystemsforcurrent
customers
Forecastrail,truckandbargesavailabilityforopportunistic
redeployment
FIGURE 3:Rail,TruckandBargeSchedulingandManagement

ing scientific methods to managerial

decisions and organizational practices
informed by the best available business
environment evidence. EBM practices are unique and organization specific
and include the systematic accumulation and analysis of data and problembased research and discussion by managers and staff. This leads to decisions
informed by both best available research
and organizational information.
A practical approach to EBM begins
with the reality that a business can
be parsed into four unique functional activities, namely Control, Operate,
Optimize and Extend, as shown in Figure 1, and further described as follows:
Having timely, accurately aligned
data in each parsed function, combined with a focus on faster, more efficient and more profitable results, is the
key to achieving the goals of a business
director at each level. Ultimately, inefficiency and waste is minimized and limited resource utilization and productivity is maximized. Using this approach,
firms can:

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Goal, Optimize Return On Assets

Requirement: Grow revenue in
multi-mode services supported by
trading activities
Actionable Output:
Improve forward visibility on
asset balances. in-transit inventory and s hipper destination
terminal rundown
Maximize revenue and volumes
related to multi-mode transporting (truck, ra il and pipe]
and blending under bundled tra
nsport agreements
Capture trading and logistics
solutions to enable storage
optimizat ion and grad e/location
differentialbased transact ions
FIGURE 4: Optimization Interactions
from Asset and Commodity Data Sets

Streamline data management and

workflow processes
Focus line staff on research and analysis within their functional area
Disseminate data throughout the
organization
Generate new insights into previously
unidentified signals
Trigger decision-making response and
new actions by business directors
Scorecards

The framework described above is

designed to move a company toward an
evidence-based mindset within each
functional activity. Business managers that take the initiative to drive organizational decisions based on the best
available information need an intuitive

22

tool that:
Provides immediate and clear feedback
Ties performance to goals and objectives
Aligns operational activity with strategic activity
Summarizes the right set of metrics
decision makers can control
Allows for problem identification within the business
Shows how decisions affect business
success
Compels decision making based on
analytics, not instinct
One of the most effective tools to
achieve these results is the visualized
scorecard. Central to the success of
scorecard use is its design rationale and
an actionable purpose that furthers the
insights into the business. A user-centered
design for the scorecard will maximize
the value of the user experience (UX).1 A
well-designed scorecard with an appealing user experience will enhance the

Requirement, Market
And Customer Insight In
Business Expansion
Requirement: Capacity
management tracking and
reporting
Actionable Output:
Asset efficiency
Fuel management
Supply management
EBITOA performance
KPI tracking
Asset risk factors
FIGURES 5: Overarching Decision Management Portal

overall quality of decisions through the

deliberative use of relevant and best available analytics. Figures 2 and 3 are examples of energy company scorecards by
functional activity. They are shown with
a corresponding example visualization.
Success Factors

To successfully build a culture of evidence-based management, firms must:

Demand that all data be validated and
that a process is in place to ensure continuous validation
Demand that an open, data-sharing
environment exists for all employees
Create and enforce appropriate workflows that underpin the culture
Resist the urge to take an ad hoc
approach to scorecard design as it
invariably results in views that are
nice to have and may have little
redeeming value
Scrupulously monitor and manage
the use of visual scorecards to achieve
actionable, decision-based views Companies employing visual scorecards
supported with accurate analytics and
timely information dissemination are
already gaining an advantage against
their competitors through decisionmaking responses and actions that
achieve faster, more efficient and profitable results.

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ORGANIZATIONAL

Insights

What the Heck

Happened to SEMS?

original Workplace Safety

Rule aka, SEMS was effective
on November 15, 2010 and
compliance of its provisions required
by November 15, 2013. This included
the 13 elements of API RP 75.1
In 2013 the Bureau of Safety and
Environmental Enforcement (BSEE)
issued 30 CFR Part 250, Oil and Gas
and Sulphur Operation in the Outer
Continental ShelfRevisions to Safety
and Environmental Management Systems; Final Rule, aka SEMS II.2 This
final rule revised and added additional
requirements to the SEMS regulations.
The rule became effective on June 4,
2013 and most of the provisions required
compliance not later than June 4, 2014.
Only the auditing requirements still
have a future compliance (by) date of
June 5, 2015.3
HE

SEMS Implementation

In the study, The State of SEMS

The Industry Transformation to a Culture of Safety first released in January
2013 and updated in November of that
year a detailed review and assessment
of industry SEMS implementation processes revealed that as might be expected SEMS regulations were incorporat-

ed into field operations management.4

Moreover, the industry reviewed and
continues to explore the good operations safety practices of other sectors.
The major organizations (operators and energy service providers) have
incorporated the SEMS requirements
into their Operations Management Systems (OMS). For example, the Chevron
Operational Excellence Management
System (OEMS) establishes managerial guidelines and process management
to assure incident reduction, improved
performance, compliance and preparation for emergency management.5
Increasingly, the industry is also in-

corporating High Reliability Management (HRM) processes into operations.6 There is a growing body of work
on HRM and those organizations that
embody these principles into operations. Those sectors where the cost of
failure can be very high, i.e., nuclear,
aviation and medicine are candidates
for HRM.
These traits include sensitivity to
operations by organizational leadership,
reluctance to accept simplistic explanation of issues, preoccupation with the
possibility of failures, deference to those
with expertise and knowledge regarding
an issue and organizational resilience.7

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Moreover, the relationship between organizational culture and High Reliability

has been known for some time.
Humans are now managing systems
that are more complex than they are
able to sense and anticipate problems
generated by those systems. Known as
requisite variety, is can be defined as,
the variety that exists in the system to
be managed exceeds the variety in the
people who must regulate it. 8
Collective requisite variety is a function of the level of trust and interaction
a group has with each other. It is maximized when, each person so behaves
as to be in his turn a valid dependable
model for the others. Each acts both a
model and observer.9 As subsequently
developed, this meets the test of organizational culture.
Culture of Safety

In May 2013, BSEE issued its Final Safety Culture Policy Statement that contained nine characteristics of a robust
safety culture.

Leadership Commitment to Safety

Values and Actions
Hazard Identification and Risk
Management
Personal Accountability
Work Processes
Continuous Improvement
Environment for Raising Concerns
Effective Safety and Environmental Communication
Respectful Work Environment
Inquiring Attitude

Processes
Preoccupation
with failure
Mindful infrastucture for high reliability
Reluctance to
simplify
interpretations
Mindfulness
Sensitivity to
operations

Capability to
discover and manage
unexpected
events

reliability

Commitment
to resilience

Underspecifcation
of structures

24

Copyright 2013 The Rapid Response Institure. All Rights Reserved.

Adapted from Weicket al. (2008). Organizing for High Reliability Sage.
Source: Holland and Shemwell (2014) provided with permission.

BSEE defines a characteristic as

a pattern of thinking, feeling, and
behaving that emphasizes safety, particularly in situations that may have
conflicting goals.10 Moreover, according to former BSEE Director James A.
Watson, these characteristics are rooted in the Nuclear Regulatory Commission (NRC) policy changes following the 1979 Three Mile Island partial
meltdown.11
The challenge many still face is developing an understanding and implementation plan for a Culture of Safety for
MY company. Organizational culture
is a critical component of competitive
advantage and is in fact who the company is and the way it behaves.
Therefore, each is different and the
industry will not develop a Culture of
Safety but thousands of Cultures of Safety, each unique yet under the umbrella
of the tenets set forth by BSEE. Additional tools are available to assess management transform their organization
as necessary to meet these new realities.
One example is a self-assessment guideline available online.12

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edge, Skills and Abilities (KSA) for a

According to the Petroleum Equipment number jobs. For example, the InternaSuppliers Association (PESA), as part tional Association of Drilling Contracof the new Workplace Safety Rule, all tors (IADC) has released new KSA comoperators will be required to develop, petencies for drilling, production and
implement and maintain a SEMS plan. marine personnel.14
Many major operators are implementMoreover, supervisors must now cering their SEMS systems supply chain- tify that employees have demonstrated
wide, which means
Nine values of a culture of safety
the requirements will
reach many service
companies and manuProblem
Personal
Safe work
identifcation
facturers as well.13
accountability
processes
and resolution
One method of
assuring SEMS compliance and auditability is by extending use
Leadership
Continuous
Foster an
of API Bulletin 97,
learning
environment
for raising
Well
Construction
concerns
Interface Document
(WCID) guidelines.
This bridging docuInquiring
Trust and
Effective
ment incorporates the
attitude
respect
communication
API 75 SEMS requirements and aligns the
operator work processes with those of the contractor. Orig- an acceptable level of competency for a
inally designed as the relationship given task. Therefore, the level of workbetween operators and drilling contrac- force fitness is greater.
tors it now encompasses other types of
suppliers as well.
So Where the Heck is SEMS?
Robbie Katanga stated, Culture is how
Training
organizations do things.15 Logically,
As with any set of change processes, industry culture is the way the industry
training is a Critical Success Factor does business.
(CSF). This includes individuals at all
While the industry transformation
levels in the organization from top lead- to a Culture of Safety is relatively new,
ership to entry-level employees.
expect this new culture to grow stronFirms are adopting simulation and ger and more ingrained into the fabric
other sophisticated training tools simi- of the sector. Sometime in the not too
lar to those used in aerospace as well as distant future, industry speak may not
completely redefining certain Knowl- use the word SEMS except for regulaDont Forget the Supply Chain

tory verbiage.
Just like today, no one thinks it is
appropriate to drive home at the end of
the day while drinking a beer, behavioral modification driven by SEMS will
truly be part of how we do business.
Endnotes
1

http://www.bsee.gov/Regulations-andGuidance/Safety-and-Environmental-Management-Systems-SEMS/
Fact-Sheet/

http://www.gpo.gov/fds ys/pkg/FR-201304-05/pdf/2013-07738.pdf

Ibid.

http://ogjresearch.stores.yahoo.net/thestate-of-sems.html

http://www.chevron.com/
about/operationalexcellence/
managementsystem/

Holland, Winford Dutch E. and Shemwell, Scott M. (2014). Implementing a

Culture of Safety: A Roadmap to Performance-Based Compliance. New York:
Xlibris.

http://www.beckershospitalreview.com/hospital-management-administration/5-traitsof-high-reliability-organizations-how-tohardwire-each-in-your-organization.html

http://www.aml-safety.com.au/AMLstores/_images/pdf-files/Weick1987.pdf

Ibid.

10

http://www.bsee.gov/uploadedFiles/
BSEE/Final%20Safety%20Culture%20
Statement.pdf

11

http://www.bsee.gov/BSEENewsroom/Speeches/2013/
COS-Speech-04_25_13-final-website-(4)/

12

http://www.therrinstitute.com/assets/cosmaturity-model-2d-edition-adobeonline.pdf

13

http://www.pesa.org/index.php/news/c/
pesa-news/legal-2013/

14

http://www.iadc.org/
knowledge-skill-and-ability/

15

http://blogs.hbr.org/2013/05/
what-is-organizational-culture/

EnergyWorkforce | FOR JOB OPPORTUNITIES, VISIT www.PennEnergyJOBS.com | Winter 2014

1411PEJEW_C3 3

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11/5/14 5:03 PM

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