IPL Master Energy Study - What's Involved?
The City Council will receive a long-waited new Master Energy Study which will provide recommendations on the best, most economical way to provide and secure electrical power over the next 20 years.
Acting IPL Director, Andy Boatright provided the City Council an update at its Jan. 8 study session.
The big question is: What is the future of the Blue Valley Power plant on Truman Road?
The city-owned power plant has three steam-generating units which currently use natural gas. The generators date back to 1958 and 1965.
The Blue Valley power plant generated only 1.73% of all IPL energy in 2016. (See Table 2 from Request for Proposal for the master energy study).
Last February, city staff presented a five-year capital improvement plan, surveying all city needs, including those involving IPL. The document called for planned expenditures of $135 million to refurbish the Blue Valley plant and another $135 million for six combustion generators. (Exhibit 4: City Manager's Report on Deferred Maintenance, Feb. 9, 2017)
A recent management performance report on IPL commented:
"Stagnant economic development results in no growth in transmission or distribution assets and diminished workload for the labor force that maintains those assets. The challenge will be to right size the labor force in the short term to match service demand and to shape the profile of the workforce in the longer term to match the power availability/reliability strategy selected for the future."
That audit's executive summary concludes that the city utility is "at a crossroads" because its current 193 megawatts (MW) of generating capacity is within "five years of end of life."
The Master Energy Study, scheduled for completion by May, is being conducted by Burns and McDonnell at a cost of $325,000.
What is a stake?: If major capital investments are made in Blue Valley power plant, we can expect those major capital expenditures to result in higher electrical rates. Overall, the future direction of our city-owned utility is at stake; which impacts both customer rates and city employee jobs.
The Independence City Council voted 5-2 to postpone a final vote on $29.7 million proposal to install automatic electric and water meters for the city's 55,000 plus electric and water utility customers for six months to April 16, 2018.
Voting to table were Council members Karen DeLuccie, John Perkins, Scott Roberson, Chris Whiting and Eileen Weir. Voting against were Curt Dougherty and Tom Van Camp.
City staff shared the low bidder agreed to extend their bid price for the six-month period with no increase in costs or change in services offered.
Mayor Weir made the motion to table to provide more time to address concerns about health risks, privacy and the impact on affected city workers.
UPDATE: Here's a copy of the report that was produced and reviewed by the Public Utilities Advisory Board.
The Board of Health was requested to look at the health issues and the Public Utilities Advisory Board to address other issues.
Dougherty and Van Camp said the low bid - unanimously recommended by the seven-member evaluation committee - should be rejected and the process started all over.
The project would be the largest single city capital investment in recent years.
The proposed vendor for the project is Core & Main.
Seven different proposals were received and a thorough review and evaluation conducted including scoring and followup interviews with the two low bidders.
The Public Utilities Advisory Board reviewed the proposal Sept. 9th and unanimously recommended the initiative to the City Council which received its own presentation Sept. 11.
The costs would be shared between three city utilities: Independence Power and Light ($10.5 million); Water ($15.6 million) and Water Pollution Control ($1.7 million).
The total costs includes material, software, support, annual recurring fees and maintenance for 10 years.
The economic analysis shows the city could recoup the total project costs in eight years.
Some saving would be reducing the number of city meter readers. In general, the number of meter readers would be reduced from the current 19 down to three when the project is fully implemented after three years.
Of the 16 employees, some are nearing retirement, some of been recently hired to temporary positions and other would be given opportunities to be reassigned to other jobs.
Core and Main (HD Supply) had the highest score based on an extensive evaluation that included 17 different categories and nearly 1,000 compliance requirements. Seven different proposals were received.
Two vendors (HD Supply and Honeywell) were short-listed for in-person interviews and then both given final evaluation scores given by the seven-member city evaluation committee.
The final evaluation score (Table 5) gave HD Supply an average score of 96.74 and Honeywell a score of 91.80.
"The Evaluation Committee determined that HD Supply provided the most reliable and cost effective solution based on the established evaluation criteria and recommended this Vendor for award," the 34-page evaluation report concluded.
After the interviews, the two firms were asked to submit a 10-year total project cost. The HD Supply final price was $28.9 million compared to $34.9 million for Honeywell. (Table 4)
HD Supply was asked to use a more accurate water meter which increased their final price to the higher amount.
If approved, the project would start in 2018 with a pilot project of replacing 5,000 electric and water meters with the entire project completed in three years. Installation of the utility meters would be done by outside contractors.
Savings realized by the project include lower labor costs, more accurate metering and the ability to manage meters remotely. Most area utilities including Kansas City Power and Light and Board of Public Utilities (Kansas City, KS) have already installed automatic meters.
IPL staff said it was a good time to undertake the advanced metering initiative because the technology is widely used and proven and the project has a relatively short payback period.
There are 58.5 million advanced meters operational in the Unites States, 40.6% of all the total 144.3 million meters, according to a December 2016 federal energy report. In 2008, the percent of advanced meters was only 4.7%.
The project began in June 2015 when the City Council adopted a resolution asking the city manager to "evaluate the benefits and costs of an automatic meter reading system."
Subsequently, the city engaged West Monroe Partners to provide technical assistance on the project. The firm has received $446,000 in consulting fees to do a feasbility study and develop a project blue print.
Opponents cite concerns about health risks from radio frequencies emitted by the meter and others privacy concerns.
The utility industry promotes advanced metering initiatives as providing consumer several benefits including the ability to better manage and monitor utility usage.
This initiative would follow an ongoing major project to replace the city's antiquated utility billing system. That project is underway and currently being tested prior to going live.
Indy Energy comments on 2016-17 City Budget
Jason White discussed several energy-related issues during the May 17 public hearing on the proposed 2016-17 budgets.
Topics covered included high rates, energy efficiency, public participation in rate setting and recent developments to diverse energy production including the curtailment of coal at two city-owned power plants.
Listen to the comments. (Comments start 6:30 minutes)
City Council postpones indefinitely IPL Rate Changes
The Independence City Council voted unanimously to indefinitely postpone changes in IPL rates at its Sept. 21 meeting.
The council action occurred following a public hearing at which several individuals shared opposition to changing a $4.14 minimum monthly bill to a $14.50 monthly customer charge.
The council has taken several months to review and better understand recommendations included a May 2015 rate study done by its long-time IPL rate consultant.
Indy Energy provided the council with several policy recommendations for consideration during the public hearing.
Other presenting included representatives from the AARP, the Natural Resources Defense Council and the Eastern Jackson County Justice Coalition.
There was broad agreement on opposing increasing the fixed customer charges as creating financial burdens on low-income, fixed income and low-energy users and discouraging energy conservation.
Others spoke in favor of developing energy efficiency programs, increasing utility assistance and support for providing community solar power.
IPL presents 2015-16 budget
Independence Power & Light has presented its 2015-16 proposed budget to the Independence City Council.
IPL Director Leon Daggett discussed major plans and initiatives for the year which include implementing a new utility billing system, developing plans for a new administrative office, developing a community solar farm and planning for decommissioning the Missouri City city-owned power plant.
The budget presentation showed that IPL rates are generally higher than those for the investor-owned Kansas City Power & Light (KCPL) and the municipally-owned Board of Public Utilities (Kansas City, KS).
Both KCPL and BPU may be increasing their overall rates. Daggett said IPL would not be seeking a rate increase.
IPL plans major wind power Purchase
Independence Power & Light (IPL) has a 20-year agreement to purchase Kansas wind power which would increase the utility's use of wind energy to approximately 13% of its total energy production.
This is a major development for the city utility and a growing commitment to generating power through renewable sources.
Economic analysis projects IPL would save $2.8 million over the 20-year agreement based on a 20-year contract with a fixed price of $33.80 per MWh.
The agreement was unanimously approved May 4 by the Independence City Council. The Public Utilities Advisory Board recommended approval.
The wind turbines are located in Marshall County in central Kansas.
This is a very favorable rate - due in part to a federal Production Tax Creditworth roughly $23 per MWH for the wind project. The federal tax credit is set to expire in 2016.
The municipally-owned Columbia Water and Light reported it was paying between $55.74 and $67.81 per MWh for wind energy it was purchasing in its recent annual report on renewable energy.
Columbia generates 7.22% of its total power from renewable sources. Independence Power & Light - with the wind purchase - will be significantly higher.
The city has another wind power agreement with Smoky Hills II which provides about 5% of the city's current energy production. The second wind purchase agreement would add another 8% energy for wind totaling 13% combined.
Other utilities purchasing power from Marshall Wind Energy include the Kansas Power Pool (25 megawatt share) and the Missouri Joint Electric Municipal Utility Commission (20 megawatt share).
IPL also is currently reviewing several proposals for solar power produced on city-owned property.
Independence will be "greenest utility" in region
Independence Power & Light director Leon Daggett shared progress by the city-owned utility using more renewable energy in a wide-ranging interview on community radio station KKFI.
Listen to the entire interview segment, which aired on the Ecoradio KC show, in the clip below.
Daggett predicted Independence - if it completes the planned wind and solar projects - will be "greenest utility in the region and Independence will be the greenest city in the region."
IPL is also constructing new administrative building which will meet LEED gold certification.
Daggett also discusses IPL responses to a City Council resolution concerning renewable energy and plans for the city-owned Missouri City and Blue Valley power plants to stop burning coal in 2016.
Read transcript of the interview
Independence considering large solar farm
Independence is considering construction a major solar farm on city-owned property in northeast Independence.
In July, the City Council adopted several goals, including IPL getting at least 10 percent of its power from renewable sources by 2018, and 15 percent by 2021.
The Independence Power & Light received strong interest in a bids to construct the solar farm and extended the bidding period from Dec. 10 to Dec. 23.
The project would be a 10-megawatt solar farm if constructed.
The proposed site would be a 30-acre tract located at Bly and Bundschu roads next to the Little Blue River.
City issues Preliminary report on Renewables
The Independence City Manager Robert Heacock provided a preliminary report on a city council resolution concerning renewable energy by posting them on the city's website and discussing them at the Dec. 1 City Council meeting.
The resolution called for a report by Nov. 30th on three topics:
- Design of the remodeled office building for Independence Power & Light to incorporate energy efficiency measures and renewable energy generation;
- Study the feasibility of renewable energy at city-owned facilities;
- Study potential incentives and programs which could be offered to IPL customers for the use of renewable energy.
Detailed studies were posted by the City Manager on the city's website. Copies of the three reports are also available here.
- IPL Memo to City Manager (Nov. 25, 2014)
- Renewable Energy Options Evaluation (Burns & McDonnell) - Nov. 25, 2104
- Brightergy Solar Energy Proposal (Nov. 19, 2014)
The Burns & McDonnell study identifies 11 city-owned buildings which might be potential candidates for solar energy (rooftop, ground or car ports).
The two best solar options are the city-owned Water Pollution Rock Creek plant which is a major energy user where solar might a viable option with at 14.6 year payback if the city installed the solar panel - a perhaps quicker if solar power was provided by a third party.
The second solar option is the new IPL Administrative offices at the former Medical Center of Independence site which the city purchase. IPL is seeking Gold LEED certification and potential Platinum for the new administrative office.
The study concludes that wind and geothermal and solar are currently not a viable option for city-owned buildings because of capital costs and the limited energy produced.
A separate review of city-owned building was done by Brightergy and developed a list of 12 city-owned building for potential solar installation. This analysis said the Independence Event Center and the new IPL administrative offices might also be potential candidates for solar installations.
The 100-page Burns and McDonnell study includes a section on potential energy efficiencies based on reviewing programs 10 different utilities.
Four are in the region (Columbia, Springfield, Kansas City, Mo and Kansas City, Ks), three in Texas, two in California and Excel Energy which provides power in Colorado, Minnesota, Michigan and Wisconsin.
The study recommends five potential approaches which might be of interest to the city:
- Utility Purchased Efficiency Program: LED Buy-Down Program where a utility buys equipment (i.e., LED light bulbs) in bulk at a reduced price and directly sells the equipment to customers.
- Community Solar Program: The utility has a purchase power agreement with a developer who installs, owns and operates a large scale solar farm. Customers have the option to purchase a portion of their energy needs from the solar facility by paying a 20-year fixed price on the energy.
- Home Energy Loan Program: Improving IPL's current Home Energy Loan Program ("HELP") that provides up to $15,000 loans to residential customers who undertake energy efficiency measures on their home.
- Increase program marketing efforts: Increase awareness of existing IPL programs as well as any new programs to increase participation.
- Rate Structure: Review the current IPL rate structure to eliminate or reduce any rate subsidization issues.
IPL has issued a Request for Proposal for a large-scale solar farm on IPL-owned property and wind energy.
Responses for the solar proposal are due Dec. 10th.
Three wind proposals have been received.
The City Council received an updated report at its Jan. 26th study session.
Citizens discuss renewable energy options with City Council
Three citizens encouraged the City Council to consider renewable energy options during its Oct. 20th meeting.
Addressing the City Council were Winston Apple, David Fyre and Peggy Young.
Also approved was a resolution to post the meeting agendas and minutes for several city appointed bodies including the Public Utilities Advisory Board.
City Council considers options for closing Missouri City power plant and IPL fund balances
The Independence City Council held an extended study session to learn about options for closing the city-owned Missouri City power plant and fund balances for the Independence Power & Light.
This was an extensive discussion involving presentations by IPL director Leon Daggett. Read The Examiner story.
City council supports renewable energy goals
The Independence City Council unanimously supported a resolution that contain an aggressive renewable energy agenda, calls for a rate study and curtail ceasing burning coal at the city-owned Missouri City and Blue Valley power plants in 2016.
The Missouri City plant would stop production; Blue Valley would be converted over to natural gas. Both plants are among the oldest in the region and mostly used on a seasonal basis to meet peak demand during the summer.
The resolution, sponsored by City Councilmember Scott Roberson, follows extensive discussion on energy issues in the community and is largely consistent with a 2011 master plan for Independence Power & Light.
The resolution received editorial support from the Kansas City Star op-ed writer Yael Abouhalkah, who wrote:
"The Independence City Council today (July 21) should move full speed ahead to promote the use of renewable energy in the city and reduce reliance on coal-fired power plants to produce electricity for its residents.
Elected officials have a welcome opportunity to show leadership on these issues because the city owns and operates Independence Power & Light.
Contrary to popular rumors, electricity rates will not soar if the city chooses this path. And eventually ending coal-fired production at old plants will reduce pollution in this region, a benefit for many."
The resolution and its adoption represents a significant policy direction for IP&L which is one of the largest municipal power operations in the U.S.
The Missouri Beyond Coal Campaign issued this media release following passage of the city council resolution.