WILLMAR -- The Willmar Municipal Utilities Commission voted Monday to approve a three-year extended warranty and maintenance contract on the utility's two wind turbines with turbine supplier DeWind Company of Round Rock, Texas.
The $9.05 million turbines, located just north of Willmar High School, were commissioned in September 2009. The current two-year warranty and maintenance contract will expire in September of this year.
The current warranty covers parts and labor for any unscheduled outage due to failure of parts or unit operations. As a condition of the warranty, the utility was required to engage DeWind in a maintenance contract of $35,000 per year per turbine.
The turbine supply agreement includes an option that allows the utility to extend the warranty within 20 months after commissioning. The final date which Willmar can exercise its option is May 6.
Utility General Manger Bruce Gomm informed the commissioners at the March 26 meeting that they must decide by the end of April if the utility would enter into the extended warranty and maintenance contract.
The question was on Monday's agenda. The cost is as follows: extended warranty at $65,000 per year per turbine; and maintenance contract at $35,000 per year per turbine, for a total cost of $600,000 over three years.
The commissioners weighed the cost of the extended warranty and maintenance contract against possibly paying $160,000 to $200,000 per year to DeWind for labor costs and paying for replacement parts ranging from $150 for a breaker to $250,000 or more to hire a crane and replace part of the drive train.
Besides covering parts and labor, the extended warranty continues the guarantee in the current warranty that the units will be available 95 percent of the time to produce power. If performance is less than that, DeWind will pay for lost production, according to Gomm and staff electrical engineer Wes Hompe.
For the first year of operation, DeWind was liable for $86,991 in lost production, according to a memo from Hompe.
Gomm recommended the commissioners approve the extended warranty and maintenance contract.
"I feel that for our situation and evaluating the value of it, it's the best choice because it minimizes the risk of unknown expenses for maintenance costs and also unknown generation losses,'' he said.
Commissioner Jerry Gesch made the motion, seconded by Marv Kray, to approve the extended warranty and maintenance contract.
"I felt it was the safe way to do it,'' Gesch said in an interview. "The experience that we've had so far has been good. But these are new machines and there is less risk involved. I think the next three years we'll have a better understanding of the whole system of the two units up there.''
Gomm and Hompe said utility personnel continue to receiving training and be as involved as much as possible with DeWind technicians when they are on site for turbine maintenance.
"Except for complicated parts, for instance, changing bearings on the generators, that's probably a skill that our guys probably wouldn't feel comfortable with,'' Gomm said. "I don't think we have the special equipment that would be required for those kinds of things.''