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MUC weighing up options on buying power from Big Stone II

WILLMAR -- Willmar Municipal Utilities could buy more power than originally thought from the proposed Big Stone II power plant. But utility officials won't make a decision on buying more Big Stone II power until a few issues are resolved.

One issue is the cost of power. Big Stone II engineers are developing new cost projections because two of the original seven power plant partners withdrew from the $1.6 billion project in September, and the size of the coal-fired plant has been reduced from 630 megawatts to either 500 megawatts or 580 megawatts.

Willmar has approved a resolution of intent to buy up to 10 megawatts of Big Stone II power through the Central Minnesota Municipal Power Agency, one of the five remaining partners. But the agency now believes Willmar could buy up to 29 megawatts.

The startup date of the power plant will affect the amount of power Willmar buys. The partners originally projected the plant would come online in 2011, but the date has been delayed to 2012 and now to 2013.

Willmar already buys 30 megawatts of power from former Big Stone II partner Great River Energy under a contract that expires in 2015. If Big Stone II comes online sooner, Willmar won't need as much Big Stone power. If Big Stone II comes on line after the GRE contract expires, Willmar could buy more Big Stone II power.

Other issues also complicate the matter: Willmar is hoping to generate 5 megawatts of power from two proposed wind turbines; the utility is studying power output improvements at the local power plant; and the city's electrical demand is projected to grow by 1½ to 2 percent a year.

"We're trying to figure out how all of those pieces fit together,'' said Bruce Gomm, Willmar Municipal Utilities general manager.

Gomm discussed those issues with the Municipal Utilities Commission during the regular meeting Tuesday afternoon.

Another issue that could affect Willmar's decision would be a requirement for Big Stone II to capture carbon dioxide, which scientists say contributes to global warming. The Big Stone II partners are estimating the cost of capturing carbon dioxide at $9 per ton. Gomm said critics say the estimate is not high enough.

"It raises the price of the output power, and that affects the economics of how much power we would look at buying,'' he said. "We base it all on the economics and the need. If they add in the carbon cost, then it will raise the price and makes it less viable for us to buy the power. Where it really will be, nobody knows because we can't even really capture it yet.''

Gomm said Willmar is benefiting from the delay "because the closer we get to 2015, the easier it is for us to transition from one to the other.''

If the utility agrees to buy up to 29 megawatts from Big Stone II and the plant comes online in 2013, the utility probably would need only a few megawatts from Big Stone II because the utility has 30 megawatts from GRE, which looks like right now would be less expensive.

But if the date got closer to 2014 or 2015 and those 30 megawatts went away, "then it's easy to say we'd use the power from Big Stone II,'' Gomm said.

Until all the issues are resolved, Gomm said he would not be making a recommendation to the commission.

In other business, Gomm said City Attorney Richard Ronning is studying a proposed agreement with the Willmar School District to lease land near the Willmar Senior High School where the utility proposes to erect two wind turbines. The agreement will be presented to the School Board for consideration.

The utility is pursuing the high school site because the Federal Aviation Administration has height restriction issues with a wind turbine site near Ridgewater College.