Sunday, November 23, 2014

Ottawa leaving power deal over costly upgrade

By DOUG CARDER, Herald Senior Writer | 4/25/2014

The City of Ottawa likely will be looking for new ways to harness energy.

Ottawa, a member of the seven-city Kansas Municipal Energy Agency, purchased 10 megawatts in 1982 from the Board of Public Utilities of the City of Kansas City, Kan. (now known as the Unified Government of Wyandotte County/Kansas City, Kan.) for the supply of electric power and energy from the entity’s Nearman Creek Power Station No. 1, commonly referred to as the Nearman Project.

“The Nearman Project was rated at 261 megawatts in 1981, and we purchased 10 megawatts of that power,” Jim Bradley, the city’s director of utilities, told Ottawa city commissioners last week. 

Environmental Protection Agency regulations are going to require a $250 million upgrade to the Nearman plant, and participating cities would be responsible for paying their share of the upgrade, Bradley said, with Ottawa’s share estimated at $9.5 million to $10 million.

The Nearman plant anticipates an outage from April 2016 through March 2017 to complete the upgrades, Bradley said.

Once the upgrades are complete, the cost of purchasing energy from Nearman would increase nearly 50 percent, Bradley estimated.

Based on the proposed increased costs after the upgrade, Bradley’s report indicated the city’s November 2013 bill from Nearman, which he said was a typical monthly bill, would have increased from $523,458 to $774,925.

“This represents a 48-percent increase in monthly billing,” Bradley said in his report.

Bradley proposed terminating the agreement with Nearman. All seven cities in the Kansas Municipal Energy Agency would have to agree to terminate the contract for it to take effect, and Bradley said all seven had indicated a desire to do so. The contract requires giving Nearman one-year advanced notice to terminate.

The city commission voted 5-0 to terminate the agreement with Nearman.

KMEA has been researching other supply options, Bradley told the commission.

“We’ve been looking the last two years with KMEA at a power supply plan that includes baseload, intermediate and peaking power,” Bradley said.

The plan includes looking at wind generation, solar and other sources, he said. 

“We have been exploring it, but this pushes the window just a little bit more than what we anticipated because Nearman was scheduled to last until 2022,” Bradley said. “But we do believe we will be able to replace that power because of the options.”

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