Tampa Electric Company (TECO) 2024 Rate Case
Synapse provided expert witness support for Sierra Club in the TECO 2024 Rate Case (Docket No.20240026-EI). Our testimony and analysis focused on the Integrated Gasification Combined Cycle (IGCC) power plant at the Polk Generating Station and the coal-fired generator at Big Bend Unit 4. Specifically, we evaluated the Company’s request to convert Polk 1 to a simple-cycle combustion turbine (CT) while retaining the ability to operate the unit on coal or petroleum coke, as well as its request to continue operating Big Bend on coal and gas instead of retiring and replacing the unit.
At Polk, we found that TECO has not used the integrated gasification (IG) technology to burn coal at the plant since at least 2018 and has not justified its decision to maintain the IG technology to preserve the option to operate the unit on coal in the future. Additionally, we found that TECO has not justified its request for approval of $80.5 million for the Polk 1 Flexibility Project to convert Polk 1 to a simple-cycle CT. At Big Bend, we found that TECO has not supported its request to continue operating the plant on coal or to include the associated costs in rates. The plant has experienced declining utilization and economic performance, and future projections indicate that this trend is likely to continue. Furthermore, we found that it is lower cost to operate Big Bend on gas than on coal, and the Company has not justified its decision to continue operating the unit on coal. Overall, we found that TECO has not justified its plans for either plant with current alternatives analysis.
We recommended that the Commission not allow the inclusion in rates of any future spending on the IG technology at Polk. We also recommended that the Commission not permit TECO to convert Polk to a CT and not allow the Company to include the associated costs in rates without an analysis showing that converting the unit to a CT is lower cost than alternatives. At Big Bend, we recommend that the Commission require TECO to cease coal combustion and retire all solid-fuel infrastructure at the plant as soon as possible. Overall, we recommend that the Commission require TECO to evaluate how much future spending, for both environmental compliance and sustaining capital projects, is avoidable with a decision to cease burning coal. Additionally, we recommend that the Commission not allow forward-going costs associated with either unit to be included in rates without proper economic analysis comparing the cost of continued reliance on the coal units to alternatives.