SE PUC recommends Nebraska power purchase

Power would come from

new coal-fired plant

By FRITZ BUSCH

Journal Staff Writer

SLEEPY EYE -- The Sleepy Eye Public Utilities Commission unanimously approved on Tuesday a motion to recommend to the Sleepy Eye City Council that it enter into a subscription agreement to purchase electrical power from a proposed coal-fired power plant in Nebraska.

The motion would allow the PUC to buy base-load power from Omaha Public Power District when its new coal-fired generation plant comes on line in 2009.

Future coal-fired energy is expected to be cheaper than gas turbine-powered energy.

PUC Commissioner Dave Logue said Sleepy Eye currently buys power on the market, which is driven by natural gas.

"We've buying market energy power now," Logue said. "We could buy power at about three cents/kw hr. for the first year plus transmission charges instead of the current rate of 4.5-5 cents."

Logue said the coal-fired electrical plant would be built in Neb. instead of this area because of environmental restrictions here.

The OPPD seeks to build a 600-megawatt plant that will burn low-sulphur coal with a sophisticated emission-control system and sell power to other entities."

Logue said the City of Sleepy Eye would buy power through the Central Minnesota Municipal Power Association from the OPPD over a 40-year period. He added that the coal-produced electricity cost is about one cent plus two cents per kw/hour for debt service. The Sleepy Eye PUC would pay about $1.5 million for about one-third the power it needs over a 40-year period.

Last year, the OPPD plant in Nebraska City, Neb. was cited as the third lowest-cost steam-generating electrical plant in the country.

Phil Heymans, who attended the meeting, asked the PUC if it was buying into the plant and would be liable. PUC members said they were only buying power and not part of the plant itself.

Weiss said OPPD looked the best among several choices because it was pubically-owned, was considered efficient and reliable.

The PUC unanimously approved Jeff Pelzel's motion, seconded by Dan Murphy, to allow the PUC to recommend to the City of Sleepy Eye that it participate in the pre-execution, subscription agreement with OPPD for 1.1 megawatts of base-load.

"This gets the ball rolling," Sleepy Eye City Manager Mark Kober said. He added that OPPD has a long history of efficient public power.

The PUC also:

* Discussed the summer Minnesota Municipal Utility Association. Logue said hydrogen- produced power is an exciting emerging technology that creates power with water and air without pollution.

* Learned from Logue that the City of Sleepy Eye watering ban reduced summer water flow from 600 gpm to 300 gpm, which was needed maintain water in case of a fire or water main break. Logue said water filters were operating at capacity (600 gpm) due to heavy lawn watering before the watering ban.

Logue said he recently allowed Sleepy Eye Public School and St. Mary's Schools to water their football fields in order due to safety and grass conservation concerns. PUC member Dan Murphy said he disagreed with allowing football field watering.

"If you're having a watering ban, don't water the football fields," Murphy said. "Cancel the games if you have to."

* Decided to maintain existing water rates for the near future.

* Unanimously approved waiving a $160 equipment rental charge on a $317.20 bill for new scoreboard labor and materials at the Sleepy Eye Public School football field.

* Unanimously approved waiving a $673.93 bill to the Sleepy Eye Chamber of Commerce incurred during Corn Days.