Coal switch to result in cost savings at Leland Olds Station

The decision is part of Basin Electric’s strategic cost management initiative.
Leland Olds Station aerial photo

Leland Olds Station

Basin Electric’s Leland Olds Station, located near Stanton, North Dakota, will realize cost savings after replacing rail shipments of subbituminous coal with lignite coal.

The decision, made final in June 2017, replaced subbituminous coal delivered by rail from Dry Fork Mine, near Gillette, Wyoming, with lignite coal delivered by rail from The Coteau Properties Company’s Freedom Mine near Beulah, North Dakota.

The decision is part of Basin Electric’s strategic cost management initiative, according to Joe Leingang, Basin Electric fuel and transport superintendent.

“We were shipping up to 150,000 tons of coal from Dry Fork Mine per year, and the rail rates for that traffic were getting too high. We ran the numbers and felt it would be economically beneficial to replace those tons with lignite,” Leingang said. “BNSF Railway has been attentive to our tough solid fuel economics and helpful in keeping the lignite traffic more economical.”

The plan for 2018 is to replace 52,000 tons of subbituminous coal with 55,516 tons of lignite coal – the difference attributable to lignite’s lower BTU rating. Savings to-date in 2018 are estimated to total $521,000.

Regarding plant operations, the switch to lignite could potentially increase maintenance costs at Leland Olds Station. Blending subbituminous coal helped reduce ash slagging on the walls, elements, and cyclone burners in Unit 2 due to its lower sodium content. Slagging inhibits the heat transfer capability of the boiler tubing.

With rail savings factored in, however, Leingang said the move still makes economic sense.

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