Independence city staff might point to analysis that shows Power & Light's six combustion turbines can be effective for at least a few more years if properly maintained, allowing some time to make the next big power decision for IPL.
Mark McDonald and a majority of the Public Utilities Advisory Board believe it best to move past the turbines as soon as IPL reasonably can.
A majority of the appointed volunteer group of advisors approved a recommendation Thursday to discontinue using the six combustion turbines after it finds an alternative – ideally cheaper – power source.
The recommendation is non-binding and would need City Council approval before the city staff even goes down such a path, but McDonald said he simply wants to make it a point of consideration as soon as possible.
“I have no faith in analytical (options),” McDonald said. “I truly believe the best option is to get rid of them and shut them down.
“There's nothing that says the switch has to be turned off tomorrow, but it's something we need to be looking at (for the immediate future).”
In its master energy plan last year, consultant Burns & McDonnell projected the city could keep 23 full-time equivalent positions for the turbines when it shuts down Blue Valley, which is slated for June 1. IPL currently has 40 positions now in power production.
Burns & McDonnell's analysis noted the turbines, though about 50 years old, have been well maintained and can be viable a couple years or longer, but necessary maintenance would quickly get expensive – nearly $47 million if done for 10 years.
The turbines account for 93 megawatts of power capacity, and while the city would need to replace about that much to satisfy its requirement with power broker Southwest Power Pool, Assistant City Manager Mark Randall said their main function is to satisfy that requirement, as they're more peaking stations. Randall has said the 23 positions is simply a projection and not necessarily how many the city will ultimately keep
“I 100 percent agree it's not a long-term solution,” Randall said of the turbines, but the city could nurse them along a couple more years cheaper than it could purchase replacement power right now, he said.
“Let's not be hasty,” he said.
McDonald said he very much questions keeping as many as 23 positions for the six turbines and would prefer the city not have to spend much more on maintenance for them.
“I'm not sure how much confidence the City Council or IPL should have of the combustion turbines as a regular energy source,” he said.
Garland Land and Jack Looney voted against the motion, while Jerry Adkins, Larry Porter and Joe Zsak supported McDonald.
“It's not a motion to do this now,” Porter said, but rather that city officials consider that option going forward.
Land said it would be premature to advise such a move now, with an interim management firm scheduled to come on board soon (see below). Shuttering the combustion turbines, along with the Blue Valley ceasing production soon, amounts to a full policy move. He said nobody is seriously looking at keeping the turbines going for 10 years.
“That's a strategic decision to not have generating capacity,” he said. “I'm not ready to make that decision now.”
INTERIM MANAGEMENT FIRM: The city received six responses to its “request for qualifications” for interim IPL management services. Walker said he's looking for a firm to help “land the plane” as IPL continues to go through a series of far-reaching moves that include future power sources and finding the next general manager, and such a firm would be on hand 18 to 36 months.
The six firms being considered are:
• Baker Tilly Virchow Krause (Chicago)
• DKMT Consulting (Orefield, Pennsylvania)
• JRL Executive Recruiters (Liberty)
• MPUA Resource Services Corp. (Columbia)
• Schumaker and Company (Ann Arbor, Michigan)
• Utilligent (Los Angeles)
Part of the Baker Tilly firm includes Springsted, which the city has used as a utility financial advisor. JRL is a professional search firm whose leadership team includes former IPL director Leon Daggett, and it helped recruit the latest IPL general manager, Brenda Hampton, who left after less than six months.
Walker hopes to have a short list by next week, then make a final pick and “have that firm on board and providing services no later than Feb. 1.”
According to the “request for qualifications,” proposals will be evaluated on experience and references, expertise of personnel, resources available to the firm and cost-effective services. A potential cost was not mentioned in the RFQ, but Walker said he plans to mostly cover the management services with money budgeted for a general manager – likely less than $200,000.
“We want something that's the most effective but also cost efficient,” he said. “If they come back more (in cost), then we'll re-evaluate.”