Fuel Blending Increases Annual Revenues by $4 Million

By Douglas J. Smith, IEng, Senior Editor

AVISTA UTILITIES GENERATES and transmits electricity and supplies natural gas and related services to nearly 600,000 customers in four states: Washington, Idaho, Oregon and California. Recently, when hydro conditions were poor, and the energy market experienced a dramatic upward turn, Avista needed more capacity. The utility looked at increasing electricity output and reducing production costs at its Kettle Falls hogg fuel (wood waste) based generating plant.

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The Kettle Falls generation plant was originally built by Avista Utilities to answer both environmental and electric production needs. Traditionally used for supplemental production, the dramatic and sudden upward turn in energy prices in May 2000 placed Kettle Falls in a key operation role. At Kettle Falls each additional MWhr represents approximately $4 million annually in either avoided purchases or additional revenue.

However, the challenge was to keep the plant running 24 x 7 and produce as many MWs as possible while maintaining a safe working environment. Although the plant had a good availability record and was producing more MWs than its design, the additional output was inconsistent.

To improve the operations of the Kettle Falls plant, Avista hired RLG International, which specializes in helping companies achieve performance improvements by getting utility management and frontline employees to focus on key performance indicators that affect plant operations.

At the plant, RLG’s project manager, Pat Tuzzolo, first trained Greg Gfeller, Avista’s performance coach, on ways to optimize plant operations and performance. Following this the two then trained the plant’s frontline employees. After the training regular operating review meetings were organized.

During these meetings, Kettle Falls’ plant manager Dean Hull, Gfeller, Tuzzolo and the frontline employees identified key performance indicators that affect a plant’s performance. These included megawatt output, safety, plant outages and cost of production.

‘Our whole focus is simple, the production of MWs. Previously we tracked data about the plant’s performance, but it was not presented in a way that everyone could understand or apply,” says Hull. However, Gfeller and Tuzzolo have shown that by tracking and analyzing data, it can help to determine best practices.

Tuzzolo and Gfeller challenged Hull and his employees to look for opportunities to produce more MWs on a consistent basis. After the second business review meeting four teams were formed and instructed to focus on consistent fuel blending of the hogg fuel. The goal was to achieve a specific moisture content of the fuel. Each crew tracked moisture content of the blended hogg fuel on a graph along with the resulting electricity generation.

Moisture content of the fuel is the key to consistent MW output at Kettle Falls. By reducing the moisture, less hogg fuel and supplemental natural gas is needed. The operational cost savings from using less hogg fuel and natural gas has equated to an annual savings of approximately $429,000.

The improved fuel quality has resulted in consistent boiler operation, enabling a record three successive months of 100 per cent plant availability. In addition, the plant now has a flawless safety record and a conservative estimate of at least one additional MWhr of production. This represents $4 million annually to the bottom line.

The key to the success of the project was recognizing the interdependency of the control operators and fuel equipment operators who prepared the hogg fuel. Because the fuel equipment operators needed feedback on whether a fuel mixture worked, the plant control operators began tracking output and availability on a graph. These graphs were made available to fuel equipment operators who in turn used them to supply fuel with consistent quality and moisture content.

When discussing the success of Kettle Falls, Scott Morris, president of Avista Utilities, said, “Performance improvement was very successful in engaging union employees. In many ways, it was more successful with union employees than with any other group.”

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