Prairie State - 2014 Year in Review

Clean Energy for our Communities

Our Footprint

Prairie State provides base-load electricity to its ownership group, which uses it to the benefit of its member-owner cooperatives and municipalities. As community-owned utilities, Prairie State’s Owners focus on delivering reliable electricity to its members at a reasonable cost, while maintaining proper protection of the environment. In total, our Owners serve more than 2.5 million families across 180 communities from Missouri to West Virginia.

Maximizing Energy’s Potential

Power Plant Operations Review and Results

Throughout 2014, and especially during the last quarter of the year, the Prairie State team made significant progress towards improved reliability and campus operations. A shift in executive and power plant leadership led to a more proactive approach for addressing operations and maintenance requirements, and delivered immediate results in the fourth quarter of the year – generation was increased by more than one million megawatt hours, the power plant recorded nearly a 30 percent higher Equivalent Availability Factor (EAF) and Net Capacity Factor (NCF), and there was an overall decrease of $8.10 per megawatt hour, as compared to the fourth quarter of 2013.

In November of 2014, the power plant reached a significant station milestone, recording the highest EAF (95.4 percent) in plant history and exceeding the previous record of continuous operations with both units (36 days). The power plant finished the year with a final EAF of 72.48 percent, marking an overall 10 percent improvement in EAF from 2013 to 2014.

Everything our team did in 2014, and continues to do, is focused on getting the performance and reliability of the facility where it belongs, and where our Owners expect it to be – as a solid baseload power plant that provides electricity and capacity needs for the long term.

The standard for lockout/tagout (LOTO) at the power plant was improved in 2014 by automating the overall process. The LOTO process is very important to our employees’ safety, and addresses the practices and procedures necessary to disable machinery or equipment while employees perform servicing and maintenance activities, as defined by the Occupational Safety and Health Administration (OSHA). Prairie State’s newly automated LOTO system improved accuracy, and allows for a more timely completion of LOTOs during planned maintenance outages.

A reliability task force team was also developed by power plant leadership, helping to further instill a proactive employee culture and creating a stronger sense of system accountability. The team assisted with fine tuning and optimization of the units, working on pertinent rebuilds and fineness readings, root cause analysis and mitigation of every lost megawatt hour. Improvements to operations alarm management and power plant reliability have been recognized in the last quarter of 2014 and into the first quarter of 2015 as a result of this task force.

In order to hedge future risk to operations, Prairie State initiated complete redesigns and overhauls to the power plant’s pulverizers, and very diligently prepared for the spring 2015 maintenance outages.

Everything our team did in 2014, and continues to do, is focused on getting the performance and reliability of the facility where it belongs and where our Owners expect it to be—as a solid baseload power plant that provides electricity and capacity needs for the long term.

Sustaining Momentum

Mine Operations Review and Results

Prairie State’s Lively Grove Mine sustained momentum in 2014 by implementing continuous improvement initiatives to improve safety, increase production, and cut costs. The total number of accidents incurred within mine operations was reduced by 76 percent in 2014, as compared to 2013 safety performance. The mine management team implemented the following to achieve this dramatic improvement in safety performance: behavior-based safety program as a part of the National Mining Association’s (NMA) CORE Safety Program, enhanced the Employee Safety and Health Advisory Group’s (ESHAG) involvement in the root cause analysis review of past accidents and review of job shadowing observations to address the primary indicators of past safety incidents, and promoted visual awareness aids to educate and inform all mine personnel of any and all safety incidents.

These initiatives were established not only to improve safety in 2014, but also to ensure continued success towards achieving its goals of becoming a zero-accident and zero-injury environment in the future.

Prairie State’s Mine Rescue Team competed and placed first at the Illinois Mining Institute State Rescue Competition in September. Eighteen teams from coal mines across Illinois, Indiana and Kentucky competed for top accolades, exhibiting their ability to respond to a potential emergency rescue. Prairie State’s team received three trophies for their first place finish, with the most prestigious being the Governor’s Trophy. As a relatively new team, this was a significant accomplishment. There is no greater insurance policy for a coal mining operation than a well-qualified mine rescue team in the event of an emergency, and Prairie State’s team continues to improve each year.

An innovative redesign of the mine plan, made by the mine’s engineering department, resulted in an increase in reserve extraction and cost avoidance for major construction. This redesign plan, aptly named the Four Quadrant Mine Plan, split the coal reserves into four quadrants, which not only helps to avoid future costly overcast construction projects, but also allows for production flexibility.

Another major cost-cutting measure developed by the mine leadership team modified the current mining process to improve efficiencies and eliminate excessive wait times in the underground mining cycle. Front line supervisors were empowered by mine management to develop a comprehensive plan for maximum utilization of all underground equipment. As a result of these recommendations, productivity increased by 17 percent, annual spend was lowered by $2M and the cost per ton metric decreased by $0.30 per the ten-year mine operation’s budget.

Continuity between the mine and other campus departments delivered further success. Representatives from the mine and environmental departments worked together to seamlessly prepare and submit a secondary mining plan to state and federal regulatory agencies. Prairie State was pleased to receive prompt approval for the implementation of this project. The secondary mining process yielded a lower cost per ton, higher fuel quality for power plant consumption, and also allowed for cost avoidance on permissible equipment otherwise required by regulatory agencies.

The mine’s efforts and planning in 2014 were impactful to the year, but also well-positions mining operations at Prairie State for the longevity of the campus.

People and Performance

Safety Matters

As Prairie State continues to mature into a leader in the power generation and coal mining industries, safety remains the organization’s prevailing focus. In 2014, an internal safety team was assembled, with a new corporate safety manager at the helm, to oversee and coordinate campus-wide safety efforts. This group of industry professionals reviewed and made improvements to current safety and health practices at the mine and power plant, developed on-site resources, and set the foundation for sustainable safety and health process excellence.

Prairie State’s two employee-driven safety teams, the Emergency Response Team (ERT) at the power plant and the Employee Safety and Health Advisory Group (ESHAG) at the mine, were also instrumental in taking safety excellence to the next level in 2014. Members of these groups provided support to their co-workers in the field and made major strides towards enhancing the overall safety culture of the campus.

The ERT attended training to improve their hazardous materials response and confined space rescue skills, with plans to add more than 30 state-certified emergency medical first responders to their roster in 2015. To assure the safe-handling and transfer of anhydrous ammonia, a key component to the efficient operation of the air quality control systems at Prairie State’s power plant, the ERT completed an in-depth process review and made improvements to add a higher degree of safety and protection for all employees and our operations. Team members are responsible for various areas of the power plant and complete inspections on a regular basis to gather data, identify trends and propose solutions to create a safer work environment.

ESHAG members are responsible for traveling underground to complete inspections monthly, looking for opportunities to improve the physical safety aspects and processes of the mine. With more than 30 state-certified emergency medical technicians on staff, and a well-trained fire brigade, Prairie State is a recognized safety leader in the mining industry.

At Prairie State, our employees begin and end their day with safety. We want every employee to return home to their families better than when they arrived.

Clean Energy and Consistent Compliance

Environmental Compliance and Responsibility

Prairie State and its Owners are committed to protecting the environment, investing more than $1 billion in Best Available Control Technology (BACT) to ensure that the power plant could successfully burn domestic Illinois coal, while continuously meeting all permit and regulatory limits. Prairie State’s power plant design also incorporates supercritical technology, consuming less coal to produce more energy and reducing the amount of carbon dioxide emitted.

Along with state of the art pollution controls, it takes a concerted effort across departments to achieve and maintain the environmental compliance achieved at Prairie State in 2014. The top four monitored air pollutants at power plants are nitrogen oxides (NO_X), sulfur dioxide (SO₂), particulate matter (PM) and mercury (Hg). Prairie State was in full compliance with all state and federal permit limits in 2014, successfully removing 85 percent of NO_X, 98 percent of SO₂, 99 percent of PM and 90 percent of Hg. Prairie State’s operation and success is dependent upon meeting and exceeding these permit requirements, and our employees recognize the importance of environmental responsibility.

In addition to maintaining continuous compliance in 2014, Prairie State’s environmental team worked collaboratively with the Illinois Environmental Protection Agency (IEPA) to allow the utilization of PM monitors in lieu of opacity monitors for compliance with Federal emissions limits. This change has virtually eliminated the need to derate the units in response to opacity monitor indications.

The release of the U.S. Environmental Protection Agency’s (EPA) proposed Clean Power Plan, which seeks to reduce carbon dioxide emissions, was highly anticipated by the energy industry in 2014. With input from our Owners, Prairie State prepared and submitted detailed comments to the agency. Prairie State is part of our Owners’ diverse energy portfolio, and with its ultra-efficient design, our campus’ carbon footprint is significantly smaller than the typical U.S. coal plant.

Powered by People

Company and Employee Initiatives

Prairie State and its employees are proud to call southern Illinois home, and they work to be good neighbors by giving back to the local community through youth support programs, environmental conservation, and regional growth. As a part of our youth support program in 2014, Prairie State partnered with Okawville Grade School and Sparta Lincoln Middle School to bring the Junior Achievement program to students in kindergarten through sixth grade. Junior Achievement educates young people about work readiness, entrepreneurship, and personal finance with hands-on, engaging programs.

Each December and February, our employees organize a large toy and food drive, donating thousands of dollars and truckloads of toys and food to area not- for-profits. 2014 marked the seventh successful year of this collection, and our employees are proud to have provided gifts and household necessities to more than 170 local children in need. The following entities received assistance from Prairie State’s Toy and Food Drive in 2014:

- Village of Fayetteville
- Sparta - Lincoln Middle School
- Sparta - Primary School
- St. Libory Elementary School
- Okawville Grade School
- The Washington County CHOW Program (Combating Hunger on Weekends)
- Coulterville Elementary School
- CMW Community Services
- Tilden Presbyterian Church
- Marissa Food Pantry

For the first time in 2014, Prairie State was thrilled to host a 5K Family Fun Run for employees and their families as a part of the company’s wellness program. The event was hosted on campus, with the start and finish line located at the corporate building. More than 170 attendees enjoyed beautiful weather during the run and activities for all ages.

Senior Management

Prairie State’s senior management team includes (from left) Tom Kordick, Don Gaston, Andrew Sipka, Randy Short and Paul Krivokuca.

Don Gaston is the President and Chief Executive Officer (CEO) of the Prairie State Generating Company. Mr. Gaston has an extensive professional background in supercritical fossil generation, comprehensive safety programs, environmental control technology and marked performance in improving power plant reliability throughout his more than 30 years in the electric generation industry. Prior to joining the Prairie State team in 2014, he served as the Director of Fossil Generation for the Public Service Enterprise Group (PSEG), one of the 10 largest electric companies in the U.S. and New Jersey’s oldest and largest publicly owned utility. In this capacity, he was accountable for the successful management of safety, environmental compliance, reliability, and financial performance of 5800 megawatts of coal fired, oil fired, and natural gas generation. As President and CEO, Mr. Gaston is responsible for the overall direction and leadership of the Prairie State Energy Campus, and oversees coordination with the Prairie State ownership group. Mr. Gaston earned a Bachelor of Science degree in mechanical engineering from the Georgia Institute of Technology, a MBA from the University of Tennessee, and completed the TVA Executive Development Program at Vanderbilt University.

Randy Short, Chief Operating Officer (COO), joined Prairie State in the summer of 2014 with more than two decades of experience in the utility industry. As COO, he oversees the direction and leadership of the power plant, safety, environmental services, IT and procurement departments. Before joining Prairie State, Mr. Short served as plant manager to the coal-fueled Baldwin Energy Complex within the Dynegy Illinois fleet. In addition, he led as plant manager at the Wood River power plant and Senior Director for Generation Programs at Dynegy’s corporate headquarters. He is recognized as a skilled power industry leader with unique experience working in Illinois and with Illinois coal. Mr. Short holds a Bachelor of Science degree in mechanical engineering from Iowa State University and an MBA from the University of Illinois Urbana-Champaign.

Paul Krivokuca has served as Senior Vice President of Mining since 2008, helping to lead the construction and start-up of the mining operations at Prairie State. He is responsible for the overall direction, management and operations of the Lively Grove coal mine, the adjacent underground coal mine which feeds Prairie State’s power plant. As a fourth generation coal miner, Mr. Krivokuca has an extensive background in the coal mining industry, with more than 30 years of experience. He is the former Chief Operating Officer of Underground Operations for Hillsborough Resources in Campbell River, British Columbia. Earlier employment included various positions with coal mining companies in the eastern United States. Mr. Krivokuca earned a Bachelor of Arts degree in liberal studies from the University of Evansville and is an active member and leader in a number of industry organizations, serving as the Director of Compliance Energy Corporation in Vancouver, British Columbia, Director of the National Mining Association, Executive Director with the Illinois Coal Association, and also locally serves as a Director for the Illinois Clean Coal Institute.

Tom Kordick, PE, Vice President of Generation, joined the Prairie State team in 2010 as Engineering Manager, and has more than 20 years of experience in the electric utility and petro-chemical industries. Promoted to his current position in 2014, he oversees the direction, management and operations of the power plant. During his tenure with Prairie State, Mr. Kordick has led the engineering efforts of the power plant through start-up into commercial operations, designed and implemented the MISO dispatch protocol, and built and executed the NERC Compliance program. Before joining Prairie State, he served as the Director of Technical Support for Toshiba International Corporation and led the Technical Engineering Support Group for the national fleet of Toshiba steam turbine generators. He holds a Bachelor of Science degree in mechanical engineering from the University of Alabama and is currently enrolled in the Executive MBA degree program at Washington University.

Andrew Sipka, Senior Director of Finance, provides overall management and strategy of the finance, accounting, tax, and risk management functions of the campus. Mr. Sipka joined Prairie State in 2011, and he has more than 25 years of experience in finance and operations at both public and private corporations. He formerly served as Chief Financial Officer and Senior Vice President of Finance at Marcone Appliance Parts Company, and he has held multiple leadership positions with such organizations as Emerson Electric, ESCO Technologies and DRS Technologies. Mr. Sipka earned a Bachelor of Science from the University of Illinois Chicago Circle and an MBA from Washington University.