CU holds on to coal-fired plant

One is building its own plant; the other is partnering with another energy supplier to transmit power to Springfield.

It’s a familiar situation for CU board members. The Board of Public Utilities two years ago was contemplating a three-way partnership with other utilities, but when those talks fizzled, it chose to send a $515 million bond issue to fund its own power plant to the August 2004 ballot. Springfield voters said no, sending CU officials back to the drawing board.

The 2005 proposal comprises:

• An updated proposal of Southwest 2, at a cost of $70 million more than was pitched last year; and

• A partnership with Omaha, Neb.-based Tenaska Energy Inc., which is planning to build a coal-fired facility in northeast Oklahoma.

Either way they go, voters would have the final say in June.

CU has done its homework. Beginning in late 2004, with the help of engineering firm Black & Veatch Corp., officials started sorting through 19 power generation proposals.

Tenaska’s proposal came in as the most cost-effective, said Scott Miller, CU director of generation. CU would receive 42 percent ownership of the 660-megawatt project, scheduled to be on line in 2012. Tenaska and Empire District Electric of Joplin were the two companies CU was considering in the three-way partnership.

CU Marketing Director Mark Viguet said the cost of the Tenaska proposal for CU is still being finalized.

Still, building its own plant appears to be the favored route among utility board members and CU staff due to transmission issues.

“Whenever you have energy delivered from long distance, one of the things you have to count on is the transmission line between here and there,” Miller said. “Our transmission system in the region hasn’t been expanded since the ‘60s and ‘70s, so there’s the potential that you could buy power from somebody and not have it delivered.”

Southwest 2 costs are also being finalized, though Viguet said early estimates indicate that the construction cost would be about $70 million more than the $460 million cost of the first proposal.

The goal is to present a power supply plan, including a proposed rate change, to Springfield City Council by the time the CU board meets again Feb. 23. Council would have to approve the proposal by March in order to get the proposal on the June ballot.

Permission granted

CU cleared a major hurdle Dec. 8 in its attempt to build the new coal plant when the Air Conservation Commission of Missouri ruled that a permit granted by the Missouri Department of Natural Resources in December 2004 was valid. Ozark Sierra Club and other environmental groups had challenged the permit, stating that the proposed new plant did not follow best available control technology practices.

“It’s the opinion of the Sierra Club, through our research, that there are technologies out there that aren’t more expensive that better meet the control standards of the (law),” said Linda Chipperfield, Sierra Club member. “One of the main concerns (at City Utilities) is the cost, and I want to emphasize that there are (cleaner) technologies that are not necessarily more expensive.”

The air commission disagreed, saying in its ruling that Missouri DNR acted properly in issuing the permit.

“MDNR has clearly met the burden of proof … to establish that the permit was issued in accordance with Missouri’s Clean Air statutes and regulations,” the report states.

The approval allows CU to keep Southwest 2 as an option, though the utility is not precluded from pursuing other options as well.

Sierra Club is not giving up, however; the group has until Jan. 7 to file suit in the Missouri courts to block the permit, and Chipperfield said the group intends to do just that. She added that there was no public discussion by the commission prior to the decision.

“They didn’t even deliberate,” she said. “We thought that was a little questionable. It’s a complicated issue.”

The other options

The argument over the environmental impact of a new plant has led to renewed discussion on the pros and cons of alternative energy sources.

CU offers wind energy to residential customers through the WindCurrent program, started in October 2000. The utility purchases energy from a wind farm owned by Westar Energy in Kansas, but the program is only an option for customers willing to pay extra – $5 more per month for a 100-kilowatt-hour block of energy.

That’s a different approach than the one taken by Empire District Electric Co., which has purchased up to 150 megawatts of energy from a wind farm owned by Kansas’ PPM Energy. Empire incorporates the acquired power into its general supply, treating it as another source for all of its customers.

CU’s Miller said Empire’s situation is different than the situation at CU.

“(Wind energy) is quite a bit more expensive than what we produce, so we created a separate program,” Miller said. “We have considered from time to time whether to incorporate the wind delivery into the system. As a difference, Empire relies a lot more on natural gas fired generation, which is much more expensive. So when they bring in the wind energy, it’s at a lower cost than their gas generation, so it makes sense for them to do it that way.”

Miller said incorporating wind energy to all CU users would raise CU’s prices.

He added that the utility has researched several different energy alternatives, including wind and solar options, through its TecHouse program.

But tests have shown that both are too expensive and unreliable, Miller said; the two solar panels at the facility only operate about 20 percent of the time, while the wind turbine operates at just 6 percent capacity.

Miller said those options could, in the future, work as supplemental sources during periods of peak energy demand, but the utility is in need of a way to expand its base load energy supply capabilities to keep up with the rapid growth in the area.

“Once we get done with that and ensure that we have good base load supply for our customers, then you come back and look at renewables, peak generation and power purchases and balance it out so that the energy we provide is the lowest cost and most reliable available.”

The utility seems to have had success in keeping customer costs down; recent reports from American Chambers of Commerce Research Association state that Springfield’s utility rates were the lowest in the country in the third quarter, nearly 30 percent below the national average.

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