City power contract back up for discussion
GLENWOOD SPRINGS, Colorado – Some, but not all, of the city’s potential electric power resources could be developed without special approval, under a proposed long-term power supply contract currently being considered by Glenwood Springs City Council.
Smaller projects, such as an estimated 280-kilowatt geothermal binary system and a 116-kilowatt hydroelectric project that’s envisioned near No Name, would be allowed under the terms of the 30-year “Service Schedule M” deal with the Municipal Energy Agency of Nebraska (MEAN).
However, something on the scale of a 1,000-kilowatt community solar garden, for instance, or any efforts to develop a coal-seam combustion project in South Canyon, would fall outside MEAN’s electrical resource pooling agreement, according to Glenwood Springs Public Works Director Robin Millyard.
Anything beyond the 2 percent limit on local generating capacity, as spelled out in the proposed power supply contract, would be subject to special approval by the full membership in the multi-state MEAN cooperative.
Millyard outlined the answers to those and other questions in a memo to be discussed at a special city council meeting set for 5:30 p.m. tonight at City Hall.
Council is giving further consideration and could take action tonight on the power contract, which is to take effect in January 2013. The matter was tabled from a meeting last month.
Also on hand tonight will be representatives from MEAN to answer questions about the city’s contract options.
The city, which operates its own electric utility, has been buying power from MEAN since 2003. The existing 10-year contract expires in December 2012.
On the table is a proposed 30-year contract. It would keep rates in check for city electric customers and give the city a full seat on the MEAN board of directors, along with other benefits offered to long-term customers.
However, the terms of the deal limit local power generation to 768 kilowatts, or 2 percent of the peak load, for MEAN participants within the Xcel Energy/Public Service Company of Colorado control area, which includes Glenwood Springs and Aspen.
A group of citizens approached city council in early December expressing concerns that the future ability of the city to generate power from local resources could be hindered under the terms of the contract.
“Our primary interest in this is that the city has phenomenal potential resources that could someday be used for local generation to help meet our needs,” said former Glenwood Springs Mayor Bruce Christensen.
“We are very different from some of the communities in Nebraska and elsewhere, in that we have some of these options,” he said. “We are hoping that council will be able to negotiate some more flexibility in the contract.”
Unlike some of the shorter-term contract options, which the city could pursue instead, terms of the 30-year deal are less negotiable, Millyard said. While electric rates will rise under any scenario, they would be lower under the recommended proposal, he said.
Still, he said he’s confident if Glenwood Springs wanted to add generation capacity beyond the 2 percent limit at some point in the future, MEAN’s membership would allow it as long as there’s no financial liability for other members.
Christensen said that can’t be guaranteed over the long haul.
“We have had good relationship with MEAN, and have had since 2003,” he said. “But who knows who will be in charge 10 years from now.”
Millyard indicated in his memo that city electric rates will be going up starting in 2013 no matter what. But that rate increase is expected to be less under the long-term deal, he said.
“I believe it is our responsibility to ensure that future power supply contracts provide the most reliable, stable and lowest cost supply for our rate payers,” he stated in the memo, recommending the city go with the 30-year contract.
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