Low Cost Energy
Texas Needs New Sources of Low-Cost Energy
Texas relies largely on natural gas for its electricity. Because natural gas pricing fluctuates widely, Texans typically pay two to three times more for electricity than customers in states that use coal-fired electricity.
For example, natural gas prices changed from $11/dekatherm in 2008 to $4/dekatherm in 2009. These unpredictable fluctuations — even when they decrease — cause an overall increase in electricity rates because of unstable pricing for the fuel source.
By way of comparison, residential customers in Kentucky pay 6¢/kW h (kilowatt hour) for coal-fired electricity. In Bay City, rates range from 11¢ to 20¢/kW h — double or triple what Kentucky residents pay. This is largely because of the continual fluctuation in natural gas prices. Moreover, the cost of alternative sources of electric generation in Texas is reaching record highs.
White Stallion Energy Center will use coal and petroleum coke, also called pet coke. Pet coke is a byproduct of the oil refining process, and is locally available. Because White Stallion is authorized to burn 100% of either fuel, or a blend, it has the flexibility to choose the lowest-cost fuel at any time to help keep electricity rates low.
White Stallion will also help keep the cost of the energy it produces low by purchasing coal from the Illinois Basin, which is 400 miles closer than the Powder River Basin in Wyoming, where other coal-fired generators in Texas obtain their coal.
There are other advantages to using this fuel source.
Illinois Basin coal is a much higher quality coal than Wyoming’s Powder River Basin coal. Illinois Basin coal’s burning efficiency is 12,000 BTUs per pound of coal while Powder River Basin coal’s burning efficiency is 8,300 BTUs per pound of coal.
Why is this important?
The higher the BTU per pound; the lower the moisture contained in the coal. Powder River Basin coal is one-third water, which means that it is one-third more expensive to ship per usable pound of fuel.
It’s true that Illinois Basin coal has higher sulfur content than Powder River Basin coal. To counteract that issue, White Stallion Energy Center will use a circulating fluidized bed (CFB) with dry scrubbers to remove more than 99% of the sulfur. The advantage of using this technology is that White Stallion can use less expensive, higher-sulfur coal, clean it up, and pass the savings onto its customers.
Locating the White Stallion Energy Center in Matagorda County also helps keep energy costs down, because of the close proximity to high voltage transmission, a constant water source and multiple transportation alternatives, all of which give White Stallion a competitive advantage.
White Stallion’s location near two railways and a federally-authorized navigation channel also contributes to lowering the cost of electricity by providing competing alternatives for transporting coal from Illinois, and pet coke from Texas refineries.