WILLMAR -- Consultants studying the future of the 57-year-old Willmar power plant say the plant is in overall good condition and can continue to function for another five to seven years if maintenance and repairs to the present equipment are made.
But more study is needed to identify ways to extend the life and enhance the performance of the plant over the next 20 years, and other ways of generating electricity should also be considered.
The first phase of what will probably be a three-phase study looking at the future of electric generation and district heating in Willmar was presented to the Municipal Utilities Commission on Monday.
The $25,000 study by R.W. Beck of St. Paul and H.D.R of Minneapolis took place during the summer. But the future of the power plant, built in 1948, has been a topic of discussion at the utilities for over a year.
Bob Bonawitz, president of the Municipal Utilities Commission, said he was pleased to have received the first phase of the study.
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"We were uncertain as to what the status of the plant was, and I think that we find that it's in really pretty good condition, things that need to be done we can plan for in an orderly fashion, and move forward,'' he said.
Mike Nitchals, utilities general manager, said the study confirms that the utilities has been on the right path in keeping operations going and using the plant as effectively and efficiently as possible.
Prices for fuel and the cost for purchased power are increasing significantly, the consultants said.
"Power markets are not pretty out there, so continued operation at least in the short run is very viable,'' Nitchals said in an interview. "In the long term, it's going to be a tougher decision, but we're not making those decisions yet. Those will be done as we do phase 2 and phase 3 of the study.''
The first phase looked at the condition of the plant, environmental considerations and operating costs. A decision on proceeding with the second and third phases will probably be made after the first of the year, according to Nitchals.
Consultants Dave Berg of R.W. Beck and Matt Clark of H.D.R. said the second phase will look at options for continued operation, options for generation and preliminary costs. The third phase will evaluate the best options identified in the second phase and refine the economic analysis.
Nitchals said the difference between the short-term and long-term outlooks is in the scope, scale and cost of what would be done to the plant. During the next five to 10 years, he said, the consultants are suggesting the present equipment can continue to be operated as upgrades and modifications are made.
The 20-year outlook would more than likely involve either replacement or major renovation of existing equipment, said Nitchals.
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"Phase three will certainly be driven by economics and feasibilities, but may also include what the community feels is important about local reliability -- some things that can't be measured in dollars and cents -- and the future of the district heating system is also tied to this,'' he said.
The power plant burns coal, but can also burn natural gas, to produce electricity and hot water for the district heating system. The consultants said coal costs increased 20 percent from $31.08 per megawatt hour in 2004 to $35.59 per megawatt hour so far in 2005. Natural gas increased from $7.85 per 1 million Btu in November 2004 to $12.03 per 1 million Btu in November 2005.
The consultants said enhanced performance and efficiency won't make up for all the increased fuel cost, but could result in a saving of 10 percent to 15 percent.
The consultants did not identify any effects from future environmental regulations because of the size of the plant, but did recommend the utilities address issues relating to control of dust from the coal stockpile, storm water runoff and ash disposal.
The consultants said some cities have closed their power plants, but plants in other cities that also provide steam or hot water in addition to electricity continue to operate.
They noted the cities of Virginia and Hibbing will be converting a coal power plant to a biomass plant under a contract with Xcel Energy.
Berg said electrical generation is a valuable commodity because the excess capacity of power plants built 30 years ago is being used up and the availability of transmission lines is tight. "There is a value to having generation in your community,'' he said.
