Archive for Thursday, December 8, 2005

Electricity news isn’t shocking

December 8, 2005

Benefits of the new power plant and other electrical items are again playing in Baldwin City's favor under a new agreement approved at Monday's city council meeting.

The council approved unanimously to join with four other area communities in an Energy Management Project Agreement with the Kansas Municipal Energy Agency (KMEA). In effect, it creates a utility "pool" with Gardner, Garnett, Osawatomie and Ottawa for purchase and sale of electricity. KMEA will monitor usage for the group, which is a new regulation in place that Baldwin would have had to have done on its own without the agreement.

Plus, because of Baldwin's electrical generating capabilities, mostly due to the $5 million generating plant built several years ago, the city enters the agreement in a strong position as a producer of electricity instead of one in need. Former utility director Terry McKinney was credited because of agreements he got signed and for pushing for the new generating plant which a previous council approved.

"Terry positioned us to be one of the strongest cities in Kansas as far as power," said Mayor Gary Walbridge. "This gives us a chance to back out of it (the agreement) if it's not beneficial to us. That's why it's good for us to be a partial member.

"To me, it's a good deal for the city," said Walbridge, in his first year as mayor. "We can get more bang for our buck. The city went out on a limb several years ago to build the power plant, but now it's paying off. In hindsight, it was the right decision to make. Some people didn't think so, but it's obvious it was."

Currently, because of increased production from new equipment, the city can generate power cheaper than buying it. But, there are times when electricity has to be purchased. This agreement helps there, but also spares the city from hiring people to monitor the system so closely as dictated by new regulations.

"The purpose of joining this pool is an attempt to maximize efficiency for the electric utility in a time when more and more restrictions are being placed on utilities, both municipal and private-owned, said City Administrator Jeff Dingman. "The Southwest Power Pool's requirements for hourly data reporting instead of weekly or monthly, for instance, would be very cumbersome and expensive in terms of manpower at the power plant for us to meet on our own without the assistance of KEMA.

"It allows us to secure network transmission for energy we purchase, which assures the energy we need can get delivered to us over the grid when we need it," Dingman said. "Joining this pool only affects our ability to purchase wholesale power and get it delivered to the city. The pool will not dictate our retail rate for energy sales to our customers. In fact, the efficiencies achieved through joining this pool should help prolong our ability to operate the electric utility at the current retail rates. Any decision related to retail energy rates is still under the control of the city council."

What the council approved was joining the pool at a cost of no more than $25,000. Most of the cost is expected to be software to monitor each system. At this time, it's unknown what that cost will be. It could be lower.

"It gives us some more flexibility," said Council Member Ted Brecheisen Jr., a member of the utility committee. "Basically, they'll buy and sell electricity for us. We didn't feel comfortable without a cost estimate. That's why the cap cost is $25,000."

Dingman agreed about the options.

"This allows us a lot more flexibility in selling power," said Dingman. "It could be significant."

The agreement was approved unanimously.

"I think it puts us in a perfect position," said Council Member Nancy Brown.

The council also approved a request from the Baldwin City Chamber of Commerce for $350 to help pay for downtown Christmas decorations. Chamber President Bill Harmon was at the meeting to make the request.

"The chamber has spent $3,500 to $4,000 a year for downtown Baldwin with the flower pots, Christmas lights and other items," said Harmon. "What we're asking for is we didn't have it in the budget winter decorations in the pots."

He said the decorations cost $450 and the chamber has paid $100 of that. Brown wondered if anyone else had been approached to help.

"Have any of the downtown businesses been asked to help?" she said.

"I haven't gone door to door to ask," said Harmon.

He also said he doesn't expect the shortfall to occur again.

"I don't think I'll be coming to you every year asking for this," he said.

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