In amending a certificate of public convenience and necessity previously awarded to the PPL Corp. subsidiary in December 2011, the Public Service Commission accepted LG&E’s testimony that the utility stands to save almost $30 million by installing the new scrubber by early summer of 2016 to comply with a one-hour sulfur-dioxide National Ambient Air Quality Standard. The reduction in SO2 emissions is required by Kentucky’s state implementation plan for Jefferson County, the home of Louisville.
In addition, the new scrubber is expected to enable the power plant to meet the Environmental Protection Agency’s new Mercury and Air Toxics Standards rule.
LG&E initially estimated it would cost about $74 million to refurbish the Unit 4 scrubber. Subsequently, the utility obtained further detailed engineering studies and cost estimates that placed the price tag for upgrading the existing scrubber at $161 million. LG&E also determined the capital cost to build a new scrubber on Unit 3 would be $132 million.
According to LG&E, the higher Unit 4 project cost included an estimated $70 million by Babcock Power Environmental for the direct cost of engineering, procuring and installing the engineered equipment; an estimated $33 million by Zachry Holdings, LG&E’s engineering contractor, for “balance of plant” scope, scrubber foundations, instrument and electrical work, ductwork improvements, balance of plant structural steel replacements and HVAC; and an additional $58 million estimated by Zachry for stack impacts, spare parts, balance of plant engineering, overheads, labor, escalation and administration and general expense.
Last September, LG&E received a study from Zachry that estimated the cost to install a new scrubber on Unit 3 would be $113.5 million. Besides that cost, LG&E estimated that if a new scrubber was constructed on Unit 3, another $18 million would be necessary for auxiliary power impacts, distributed control systems, chimney impacts, balance of plant, overheads, escalation, spare parts and administrative and general expenses, for a total new scrubber cost of $132 million.
LG&E spokesman Brian Phillips said construction on the new Unit 3 scrubber is scheduled to start in November 2014.