Utilities Commission reviews '05 power supply report
WILLMAR -- The Willmar Municipal Utilities Commission reviewed the 2005 power supply report at the regular meeting Monday. The overall cost of power totaled $11,147,191. Of the $11.1 million total, the cost of purchased power accounted for $4,456...
WILLMAR -- The Willmar Municipal Utilities Commission reviewed the 2005 power supply report at the regular meeting Monday.
The overall cost of power totaled $11,147,191. Of the $11.1 million total, the cost of purchased power accounted for $4,456,572. Also, the cost of reserving energy at the source (known as capacity) amounted to $5,007,219, and generation (the cost of generating power locally) was $1,683,399.
Of the $4.45 million spent on energy purchases, costs attributed to Midwest Independent System Operator accounted for $570,000, which represented 6 percent of overall costs but just 1.3 percent of energy purchases. MISO costs include administrative fees and charges.
MISO was established by the Federal Energy and Regulatory Commission in December 2001 to operate electrical transmission systems in the upper Midwest.
Utilities General Manager Mike Nitchals said MISO was the primary area of cost increases in 2005. MISO costs had been nearly negligible in previous years.
The utilities' major supplier of purchased power is Great River Energy, followed by the Western Area Power Administration. Nitchals said the utility is beginning to see the effect this year of the 39 percent increase in the cost of coal and freight. Also, he said WAPA rates increased by 15 percent and the GRE contract increased by 2 megawatts, "so we're paying for capacity there. The MISO market continues to stay high. This is what we're looking ahead to.''
In other business, the commission:
- Discussed two upcoming legislative meetings. Several commission members and utility officials will attend.
The first is the American Public Power Association Conference Feb. 28-March 3 in Washington, D.C. Nitchals said local officials will meet with Minnesota's congressional delegation to discuss the lack of railroad competition, the effect of transmission organizations on costs, and preserving WAPA cost-based rates.
During the Minnesota Municipal Utilities Association Conference March 29-31 in Bloomington, officials will discuss eminent domain, electric service territory and renewable energy, said Nitchals.
- Received the year-end report on revenue and sales from the electric, water and heating divisions. Electric revenue in 2005 was up 5.4 percent from 2004, water revenue increased 1.3 percent and heat revenue was up 8.9 percent.
The utilities sold 4.6 percent more electricity, 1.5 percent more water and 9.4 percent more heat in 2005 compared with 2004.
Nitchals said 2005 was a "reasonably good year,'' but revenue "still fell short of what our long-term goals are for earnings for reinvestment in the utility.''