Northeast power plant to be evaluated

Published 7:02 am Wednesday, May 12, 2010

Several Austin residents voiced their support of converting the city’s northeast power plant from coal to natural gas Tuesday night, but before anything permanent happens at the facility, work needs to be done to evaluate just what kind of shape it’s in.

The roughly 40-year-old plant, located near Todd Park, is being dropped from a power-buying agreement with the Southern Minnesota Municipal Power Agency on Sept. 1. When that happens, the agency will no longer use power from the plant, but because the city is still under contract with SMMPA until 2030, the facility can’t be used to directly power Austin homes either.

As a result, Austin Utilities recently commissioned a study to determine what the plant’s future could be. Last month, engineering consulting firm Burns and McDonnell presented their finished study and recommended that the facility make the relatively inexpensive switch from coal to natural gas.

The cost for such a switch would be minimal because the plant already has the capability to fire natural gas. In fact, Austin Utilities power production director Alex Bumgardner said the plant, which does not run year-round, has been up-and-running in recent weeks and has been fueled at times by natural gas.

Other options examined in the report, such as converting the plant to a bio-fuel facility, would likely be cleaner long-term but much more expensive up-front — the cost of constructing a bio-fuel burner alone would be nearly $100 million. Coupled with the fact that the energy market, like most markets, is on shaky grounds these days, the report suggested that Austin Utilities avoid putting a lot of money into the plant now and instead wait for the market to rebound.

Bumgardner said he agreed with this idea when the report was presented last month.

“There are a lot of ‘ifs’ out there right now,” he told the Austin Utilities board. “To me, it makes sense to hold out for a few years.”

During that time, Austin Utilities could look to sell power on the open market after the SMMPA deal runs out. If the plant goes completely natural gas, Bumgardner said he estimated the facility could generate at least $1 million annually in energy sales, while running the plant would cost $1.5 million.

However, Austin resident Jim Stiles, who owns Super Fresh Produce and has pushed for a city wind turbine ordinance, said the benefits of cleaner energy can’t necessarily be measured in dollars and cents.

“With coal, it’s not about economics. It’s about out future,” he said. “We certainly support the move (to natural gas).”

Al Layman, a citizen who lives near the power plant, echoed Stiles’ sentiment.

“I do hope we don’t continue with coal out there,” he told the board.

But while the plant can certainly fire natural gas intermittently in the short term, the long-term plans for the facility will largely depend on what shape the plant is in. To that end, Austin Utilities will be taking bids in the next month or two for evaluation work that should, ultimately, determine the plant’s “life expectancy.”

The Austin Utilities board is scheduled to next meet on June 8.