Bids to Decommission Missouri City Power Plant Result in Major Cost Differences
In 2017, the City Council decided to decommission the city-owned Missouri City Power plant located on 87 acres in Clay County on the Missouri River.
The City Council accepted a $9.7 million proposal from Environmental Operations Inc even though a bid for approximately half that amount was received from another qualified firm.
The matter received community discussion and a formal hearing before the Public Utilities Advisory Board (PUAB) which voted 4-1 against recommending the higher bid to the City Council.
PUAB board members raised several questions about why the lower bid from Commercial Liability Partners was not acceptable.
Missouri City began operations in 1954 and which stop generating power in September 2015.
Earlier 2015 engineering studies indicated the cost for closing out the power plant could top $17 million to dismantle and sell the site which also includes a recently closed coal ash pond. The ash pond closure project cost approximately $2 million.
Subsequently, the city began exploring options to demolish and the transfer the environmental risks to a third party based on a presentation it heard from Environmental Operations in June 2016.
The city issued a formal RFP in February 2017. Three bids were received by the March 31 deadline. Environmental Operations and Commercial Liability Partners submitted proposals. One proposal was considered non-responsive.
City staff, during the PUAB meeting and in city council documents, said they were directed by the City Council on May 15, 2017 to negotiate a contract with Environmental Operations which resulted in the contract currently before the City Council.
During the PUAB meeting, Independence Power and Light staff said they did not check references, contact or interview Commercial Liability to explain or clarify any questions or concerns about the substantially lower cost bid.
Commercial Liability Partners bid was $4.25 million compared to $8.9 from Environmental Operations.
The Public Utilities Advisory Board asked several critical questions about Environmental Operations and received responses from the city staff. The PUAB recommended against awarding the contract to Environmental Operations.
The ordinance approving Environmental Operations is for $9.765 million. The St. Louis-area firm requested additional funds based on recent on-site field work which found asbestos and other environmental risks needing abatement.
The City Council received an update (9/10) on the project. The report said the project should be completed the spring of 2019 and has expended $4.9 million of the $9.7 million budget.
IPL staff indicate costs for the Missouri City project would be paid from available cash reserves, but those costs would be recovered through higher utility charges. IPL has 57,000 customers.