Austin Utilities to look at options for power plant

Published 9:51 am Wednesday, August 19, 2009

A regional power agency plans to pull the plug on a contract with Austin’s power plant in about a year.

The city’s 32-year-old northeast plant, located at 3511 11th St. N.E. near Todd Park, will no longer be selling energy to the Southern Minnesota Municipal Power Agency come Sept. 1, 2010, according to a decision made last week at a SMMPA board meeting.

Currently, power generated at the plant is managed and sold by SMMPA.

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When that contract ends, Austin Utilities will look at a number of options for the coal-fired, steam electrical plant, including possibly selling the output or converting it to a different type of power source, general manager Jerry McCarthy said.

“Hopefully, we can use it right after,” McCarthy said, but added that there might not be a plan immediately in place.

The general manager said there likely will be a need for less staffing at the plant after the contract ends.

McCarthy said he is hopeful layoffs can be avoided through attrition, retirements and job shifts.

There are 30 employees working at the plant.

“We’re disappointed, but looking at it as an opportunity,” McCarthy said.

In an unrelated move, Austin Utilities also recently announced that they would not be extending a power-sales contract with SMMPA.

Austin Utilities is among 18 regional utility agencies that buy energy from the electricity wholesaler.

The current contract, in place since 1980, runs for another 20 years, and McCarthy said it would be best at this time to wait on extending it.

McCarthy said because the energy industry could change so much in that time, it wouldn’t make sense for Austin to get locked into a deal that might not be efficient down the road.

A new deal with SMMPA would still be considered, McCarthy said, as the current contract nears its end.