City Beat: CU, citizens face off over power plant proposal

by Eric Olson

SBJ Reporter

eolson@sbj.net

City Council members heard two views of a proposed new Springfield power plant at its April 12 meeting.

On one side, City Utilities management and its Board of Public Utilities told council that the proposed $578.5 million Southwest II coal-fired power plant is the most reliable, affordable and environmentally responsible option to meet Springfield's future energy needs.

In opposition were voices from citizens who mostly feared pollutants emitted by a third Springfield power plant. They asked that CU take a harder look at energy conservation.

CU officials would like for City Council to place the question before voters Aug. 3. Utility projections say electricity demand would exceed current energy production by 2008.

And conservation efforts alone are not a viable option, said Ron Ponds, chairman of CU's board.

"We cannot save, in my opinion, 300 megawatts with conservation efforts," Ponds told council. "If we want to maintain the reliable electrical supplies at affordable prices for our customers, we must take a look at this issue."

According to Mark Viguet, senior manager of marketing and communications, CU's 96,000 electric customer base grows by about 1,400 customers, or 1.46 percent, annually. Energy consumption is projected to grow by 2.8 percent each year.

According to feasibility studies, CU must take action now, Ponds said. Its proposal would bring new electric power to CU customers by 2009.

But first, CU officials must get the proposal on the Aug. 3 ballot. Council decides April 26. If sent to the ballot, citizens would be asked to approve a $515 million bond issue to fund the project and to accept a 16 percent electric rate increase phased in over four years beginning in October to pay off the bonds.

But Stan Van Velsor, representing Southwest Missouri Citizens for Clean Energy, believes energy efficiencies such as tiered rate structures, new building codes and tax credits would buy Springfield about five years before reaching its energy capacity.

In the meantime, he said, CU could conduct an energy efficiency feasibility study to determine if continued conservation is a viable long-term option. He opposes the coal-fired plant, which by Van Velsor's estimates would emit 1.5 million tons of pollutants each year.

"I would like to see them conduct a feasibility study ... before we have a vote to build a coal-fired power plant because if we spend $515 million to build a coal-fired power plant, there is likely to be little money to put into energy-efficiency and sustainable energy processes here in this community," Van Velsor said.

Van Velsor cited San Francisco, where energy-consulting firm Rocky Mountain Institute recently performed an energy efficiency feasibility study. Initial studies can cost $5,000, while full-blown studies like the one in San Francisco run $100,000, Van Velsor said.

Van Velsor thinks citizens would be receptive to energy conservation, based on the success of CU's recent fluorescent compact light bulb sale where 4,500 light bulbs were sold in less than two hours.

But Councilman Bob Jones doesn't see this as an either/or issue, rather one where energy conservation and a new plant can work together.

Other citizen suggestions included a nuclear power plant and a plea from a child: "If you build more power plants, think about the children and even yourselves," Dakoda Reynolds told council. "People who like the wilderness, like my dad, will not be happy campers."

Pediatrician Gary Wright asked council to consider community health. "Coal would not be cheap if health costs were on your monthly utility bill," he said.

Some concern from council centered on CU's debt-to-equity-ratio, which would be 1:1 after issuing the bonds. Councilman Conrad Griggs estimated the new bonds would create a debt service of more than $700 million, versus current net assets of about $750 million.

"There is some concern about some EPA regulations that may come down the pike that may require the utility to spend extra money. If that happened, how would we comply and where would we get the money?" Griggs asked.

Ponds said there are contingencies built into the bond revenue proposal to cover emergency expenses. "Barring anything catastrophic, I think we're going to be in very good shape to react to those," Ponds said.

CU's proposed plant would generate 300 megawatts gross, 275 megawatts net, of base load electric power. Southwest II also would minimize use of the James River Power Station, which turns 50 years old this year, CU officials have said. CU's other generator, Southwest Power Station, was constructed in 1976.

Ponds said that based on current Missouri Department of Natural Resources permit requirements, the new plant would be among the safest and cleanest plants in the country.