New gas turbine

comes on line

Change in

rate structure

approved by PUC

By RON LARSEN

Journal Staff Writer

NEW ULM -- The city's newest 25-megawatt gas turbine generator has passed its test and is commercially generating energy, the New Ulm Public Utilities Commission was told at its June meeting Tuesday night.

The commission also approved a change in the rate structure as a result of the cost for the additional capacity and buying more expensive energy. The energy acquisition adjuster's capacity portion was folded into the basic rate structure, becoming a fixed charge. It did not raise rates because customers had been paying it as an add-on charge.

The turbine, which cost an estimated $7.7 million, will increase the Public Utilities' generation capacity by over 50 percent to a total of 70.5 megawatts. The PUC's other gas turbine produces 23 megawatts, and its three steam units generate a combined total of 22.5 megawatts.

While the new unit is used, Utility Planning and Development Engineer Dan Sonnek told the commission, it is in "zero-hour" condition, having been thoroughly overhauled, and it carries a two-year warranty.

"An advantage of a used machine is that it keeps costs down," Sonnek explained, "and it was almost immediately available. We would have had to wait from three to five years for a new one."

It also resulted in the project coming in $500,000 under estimate, he said.

PUC Director Bob Stevenson said 90 percent of the city's energy is purchased, as opposed to being produced locally. "However, the additional generation capacity is more than adequate to cover our peak generation periods if we're not able to buy power at a reasonable price."

Sonnek praised the PUC staff that installed the turbine nearly flawlessly.

Commissioner James Hogan suggested the commission send a letter commending the employees who took part in the installation.

On the negative side, Stevenson reported the PUC had received a violation notice for failing to perform a stack test using coal fuel by the deadline, March 13, 2001.

"We had asked for an extension of the deadline because we were not ready to perform the test," Stevenson said, "but the extension wasn't processed in time. If we had attempted to do the test, we would have failed and would have been fined."

The other dark cloud arose over provisions of the new omnibus energy bill. Stevenson reported changes to the Conservation Improvement Program were extensive and potentially expensive for New Ulm's Public Utilities. Potential rebates to customers as a result of some changes could end up costing the PUC $250,000, he said.

The PUC received a letter from the Brown County Veterans Council commending the commission for "your timely and quality work" in installing natural gas service to the Eternal Flame in the Brown County Veterans Memorial located on the courthouse grounds.