Cov­ing­ton City Coun­cil votes to pur­chase power

Ex­tra megawatts sold by Ma­ri­etta

The Covington News - - FRONT PAGE - By Rachel Oswald

The Cov­ing­ton City Coun­cil voted to en­ter into ne­go­ti­a­tions for the pur­chase of 10 to 15 megawatts of ad­di­tional base load ca­pac­ity and to pur­chase 20 megawatts of peak­ing ca­pac­ity at its Mon­day night city coun­cil meet­ing.

The pur­chase of the base load ca­pac­ity will come from the city of Ma­ri­etta, a Mu­nic­i­pal Elec­tric Author­ity of Ge­or­gia mem­ber, which has some ex­tra base load ca­pac­ity it wishes to sell. As a mem­ber of MEAG, Cov­ing­ton will take part in the ne­go­ti­a­tions along with other in­ter­ested MEAG cities.

Base load ca­pac­ity is en­ergy used con­stantly. A base load plant is the most ex­pen­sive to build but it has rel­a­tively low op­er­at­ing costs. The base load ca­pac­ity from Ma­ri­etta is gen­er­ated through nu­clear and coal-fired plants.

At the rec­om­men­da­tion of Bill Meecham, util­ity di­rec­tor for the city of Cov­ing­ton and Charles Parmelee, an en­ergy con­sul­tant, the city will ne­go­ti­ate for the pur­chase of 10 to 15 MW from Ma­ri­etta which is re­port­edly look­ing to sell a to­tal of 50 MW.

How much of that base load ca­pac­ity Cov­ing­ton is able to ac­quire will de­pend on how many other MEAG cities wish to pur­chase ca­pac­ity from Ma­ri­etta. In a memo to the city coun­cil and mayor, Meecham rec­om­mended that the city pur­chase at a min­i­mum 7 MW of base load ca­pac­ity.

Once the Ma­ri­etta en­ergy is ac­quired, it will be avail­able for use in 2008.

While prices will not be fi­nal­ized un­til the ne­go­ti­a­tions with Ma­ri­etta are com­plete, Parmelee es­ti­mated that the cost of 1 MW would be close to $1 mil­lion if pay­ment were made in a lump sum. If pay­ments were spread out over a pe­riod of 30 years, the price of 1 MW would be closer to $2.6 mil­lion.

Cov­ing­ton is cur­rently pur­chas­ing 30 per­cent of its en­ergy needs from the mar­ket. While mar­ket prices have been rel­a­tively stable for the past sev­eral years, ac­cord­ing to Parmelee should the price in en­ergy surge, Cov­ing­ton cus­tomers will see a sharp in­crease in their en­ergy rates un­less they pro­cure a greater en­ergy sup­ply of their own.

“We feel that sup­ply­ing more of our base power is im­por­tant at this time oth­er­wise we’re sub­ject to the volatil­ity of the mar­ket,” Cov­ing­ton City Man­ager Steve Hor­ton said to the coun­cil at a work ses­sion be­fore their Mon­day night meet­ing.

The pur­chase of 20 MW of ad­di­tional peaker ca­pac­ity will be ac­quired for the city by MEAG from an out­side plant owner on a 20-year con­tract ac­cord­ing to the memo.

Peak­ing ca­pac­ity is en­ergy used on only peak load days, most of­ten the hottest days of sum­mer when res­i­dents are run­ning their air con­di­tion­ers. While peaker ca­pac­ity plants are the least ex­pen­sive to build, their op­er­at­ing costs are the most ex­pen­sive.

Peak­ing ca­pac­ity also counts to­wards meet­ing the city’s re­serve re­quire­ment. Most mod­ern peak­ing units run on nat­u­ral gas though some oth­ers use oil.

The peaker ca­pac­ity pur­chased by the city would be avail­able for use in 2009.

Ac­cord­ing to a pre­vi­ous in­ter­view with Meecham, the cost of peaker en­ergy un­der the con­tract is $43,200 per MW.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.