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A Decision Support System for Fuel Supply Chain Design at Tampa Electric Company

Author

Listed:
  • Anna Danandeh

    (Department of Industrial and Management Systems Engineering, University of South Florida, Tampa, Florida 33620)

  • Bo Zeng

    (Department of Industrial Engineering, University of Pittsburgh, Pittsburgh, Pennsylvania 15260)

  • Brent Caldwell

    (Tampa Electric Company, Tampa, Florida 33601)

  • Brian Buckley

    (Tampa Electric Company, Tampa, Florida 33601)

Abstract

Tampa Electric Company (TECO), which serves 687,000 customers in Florida, generates 60 percent of its electricity using coal-fired generators. To meet environmental regulations on the emission of coal combustion, it must carefully mix several fuels of different qualities to make safe, environmentally friendly, and affordable blends that are generator specific. We worked with the management and engineering teams at TECO to develop a decision support platform, which centers around a mixed-integer programming (MIP) model to comprehensively capture system specifications, requirements, and operations in all key aspects of TECO’s fuel supply chain. This platform enables TECO to make optimal procurement, transportation, blending, and burn decisions and satisfy all environmental regulations. We estimate that the implementation of this model can provide TECO with annual fuel-cost savings of 2–3 percent, which translate to millions of dollars of savings in total fuel costs.

Suggested Citation

  • Anna Danandeh & Bo Zeng & Brent Caldwell & Brian Buckley, 2016. "A Decision Support System for Fuel Supply Chain Design at Tampa Electric Company," Interfaces, INFORMS, vol. 46(6), pages 503-521, December.
    • Handle: RePEc:inm:orinte:v:46:y:2016:i:6:p:503-521
    DOI: 10.1287/inte.2016.0870
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    References listed on IDEAS

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    1. Shih, Jhih-Shyang & Frey, H. Christopher, 1995. "Coal blending optimization under uncertainty," European Journal of Operational Research, Elsevier, vol. 83(3), pages 452-465, June.
    2. Sarker, Ruhul A. & Gunn, Eldon A., 1997. "A simple SLP algorithm for solving a class of nonlinear programs," European Journal of Operational Research, Elsevier, vol. 101(1), pages 140-154, August.
    3. Liu, Chiun-Ming & Sherali, Hanif D., 2000. "A coal shipping and blending problem for an electric utility company," Omega, Elsevier, vol. 28(4), pages 433-444, August.
    4. Sherali, HD & Puri, R, 1993. "Models for a coal blending and distribution problem," Omega, Elsevier, vol. 21(2), pages 235-243, March.
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    Cited by:

    1. Prasad, Sanjeev K. & Mangaraj, B.K., 2022. "A multi-objective competitive-design framework for fuel procurement planning in coal-fired power plants for sustainable operations," Energy Economics, Elsevier, vol. 108(C).

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