GRDA Board approves purchase of turbine generators for new electric generation plant

An aerial view of GRDA’s Coal Fired Complex (Chouteau), combined with an artist’s rendering of Unit 3 (foreground). The GRDA Board of Directors approved the purchase of the new combined cycle gas fired unit’s turbine generators during its January 22 meeting in Vinita.

An aerial view of GRDA’s Coal Fired Complex (Chouteau), combined with an artist’s rendering of Unit 3 (foreground). The GRDA Board of Directors approved the purchase of the new combined cycle gas fired unit’s turbine generators during its January 22 meeting in Vinita.

Vinita – Recent action by the Grand River Dam Authority Board of Directors will bring the utility closer to its long-term goals for low-cost, reliable electricity production while also bringing hundreds of new construction jobs to the area over the next three years.

When they met on January 22, GRDA Directors gave their unanimous approval for the utility to purchase turbine generators for a gas-fired generation unit to be built adjacent to the existing two-unit (Unit 1 and 2) GRDA Coal Fired Complex (Chouteau). The new unit (Unit 3) will be a “combined cycle” with the capability to efficiently produce 495 megawatts (MW) of electricity while also helping GRDA to meet new regulations set forth by the Environmental Protection Agency (EPA).

“We are very appreciative of our board for making this decision and all the time and effort they have put into this plan,” said GRDA Chief Executive Officer/Director of Investments Dan Sullivan. “This recent action is a key milestone for GRDA because it moves us that much closer to an even more beneficial and efficient portfolio of generation assets.”

The combined cycle unit will produce electricity in two ways: Natural gas is first used to fuel a combustion turbine-generator, and then heat from that process will be recaptured and used to produce steam to turn another steam turbine-generator. Because of this heat recovery process, the GRDA unit will be very efficient.

“Part of the board’s strategy is to reduce our reliance on coal,” said Sullivan. “We can achieve some of that with this new facility. By burning natural gas from right here in Oklahoma, we will have a diversified generation portfolio that will continue to keep costs low for our customers.”

According to GRDA Assistant General Manager of Thermal and Hydro Generation Charles Barney, “when finished, this unit has the potential to be the most efficient combined cycle plant in the country.” He also said that GRDA’s selection of the unit was based on a number of factors; all oriented towards providing customers the lowest cost.

“We expect it to meet environmental standards,” said Barney, “and the pricing options we received fell below our budgeted amounts. We remain optimistic that the entire project can be completed at or below budget.”

Cost for the turbine-generators is $77,840,000, with total costs for the entire Unit 3 estimated to be $372 million. GRDA arrived at this decision, and these numbers, after much research and evaluation, as well as assistance from the Black & Veatch engineering firm. Contracts for the turbine-generators were awarded to Mitsubishi Power Systems Americas, Inc. (Lake Mary, Florida), subject to negotiations of satisfactory final terms. To provide natural gas fuel transportation, the GRDA Board also authorized GRDA management to finalize negotiations of a contract with Enable Oklahoma, an Oklahoma-based pipeline company.

Sullivan noted that constructing this type of facility will allow GRDA to minimize capital costs.

Meanwhile, the life-cycle costs no lower than the alternatives.

“Plus, it will be very reliable and we do expect it to eventually become GRDA’s primary generation unit,” he said.

Currently, the two-unit GRDA Coal Fired Complex is the primary generator for the facility. As part of the long-term generation plan, GRDA will also be doing a major retrofit project of the air quality controls on Unit 2, to meet environmental standards. A decision on Unit 1, whether to retrofit as a gas-burning unit or decommission, is still pending.

As those projects move forward, it will have a positive impact on the economy as well, said Sullivan.

“There will be a workforce of nearly 500 people devoted to the retrofit of Unit 2 and the construction of Unit 3 during the 2015-2016 timeframe,” he said. “As contractors get underway on this work they are going to need skilled labor here in our area.”

According to Barney, the new Unit 3 is expected to be put into service in spring 2017. Its addition to will bring greater balance to an electric generation portfolio that already includes coal, gas, hydro and wind assets in Oklahoma.

Headquartered in Vinita, GRDA is Oklahoma’s state-owned electric utility; fully funded by revenues from electric and water sales instead of taxes. Directly or indirectly, GRDA’s low-cost, reliable; electricity serves nearly 500,000 homes in Oklahoma and stretches into 75 of 77 counties in the state. At no cost to Oklahoma taxpayers, GRDA also manages 70,000 surface acres of lakes in the state, including Grand Lake, Lake Hudson and the W.R. Holway Reservoir.

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