The Blue Valley Power Plant closure looms next year, and the city of Independence has lined up power capacity to replace it from Oneta, a natural gas-powered plant in Oklahoma.
But while the city waits for the all-clear on that change, a few more Power and Light items in the near future require the council's consideration.
For one, employee transition. Also, what to do with the power plant structure, and how long to continue operating the combustion turbines, as they are aging but remain in good repair.
Monday's City Council agenda included a presentation on the power plant and combustion turbines, but a council majority voted to let the Public Utilities Advisory Board hear the report first.
Mayor Eileen Weir, though she approved the motion, said she believes there's no concrete policy on whether or not the Public Utilities Advisory Board must hear a utilities presentation first before the council. She also noted that the council was not slated to make any decisions or recommendations Monday.
Council Member Scott Roberson said he was willing to remand part of report, but said it would worthwhile hearing about Blue Valley matters because everyone has agreed the city is closing the plant on Truman Road.
In May, the council voted in May for a 10-year contract with Oneta for 45 megawatts to replace Blue Valley and maintain the city’s required capacity with the Southwest Power Pool, IPL's wholesale energy broker. The SPP has been reviewing the change, and Assistant City Manager Mark Randall said the city expects to get approval, as well as the estimated transmission costs, by mid-November.
Randall said transmission costs appear to be well below the $1 million threshold to opt out of the Oneta contract.
The Oneta contract presumably will kick in June 1, 2020, and the city is looking at reducing power production positions from 40 full-time equivalents this fiscal year to 23 next year, as recommended by the master energy plan compiled last year. To that end, the city retained to Darda HR to assist the human resources division and come up with a transition plan.
“We need to have this plan in place, and to treat them right,” Randall said.
The 23 full-time positions would be to operate the six combustion turbines, which are paired in three locations around the city. Burns & McDonnell's master energy plan noted that the turbines, despite being about 50 years old, have been well-maintained and can still be effective for several more years.
The turbines account for 93 megawatts worth of capacity, so replacing that power would cost more than the $13.6 million for Oneta. According to Randall's report, it will cost the city about $46.9 million to continue maintaining and operating the combustion turbines. For comparison's sake it would cost about $52.8 for 93 more megawatts with Oneta over 10 years, in large part due to transmission upgrade costs.
A new engine plant would have less labor costs but would cost more than $126 million to build. Even bonded out over 30 years, the 10-year cost for that would more than $76 million.
Randall said the figures are estimates and would require fine-tuning, but he said it's clear keeping the combustion turbines going a bit longer is the best option.
“I'd love to keep them going for a couple years while the dust settles with everything else,” he said. “They've been getting called a lot (by SPP to produce power).”
As for the Blue Valley plant, it remains in good structural condition, even if it can't operate as efficiently as newer energy sources. Thus, it could be repurposed after removing the smokestack and power equipment. Randall said the city has received some unsolicited enquiries about possible re-uses, and examples in other cities include a brewery and a community center (like Independence's Sermon Center at the original power plant). The city could send out a request for proposals, he said.
“We could keep it for city functions,” Randall said. “It's such a great structure, we could so something with it.”
With Blue Valley's closure imminent and long-term maintenance thus not a big worry, Randall said SPP has called on the plant to fill in some short surges in power demand, since IPL is willing to fire up on shorter notice and for small lengths of time. Under normal circumstances, that would not be the case. But already this fiscal year the city has netted about $350,000 profit from operating the turbines and Blue Valley.
“It's not doing anything unsafe,” Randall said. “They're trying to maximize making money from it while still possible.”