Iola officials will continue to pursue the addition of used diesel-powered generators to the city’s electric generating capacity.
Where they’ll sit, idle.
“We’re not planning to run them,” Scott Shreve, Iola’s energy consultant, said at Monday’s City Council meeting. “All you need is iron in the ground.”
He explained the rationale.
In order to maintain its status as a “partial-requirement electric utility,” Iola must be able to prove it can produce enough electricity on a given day to meet the entire city’s peak needs, plus 10 percent — about 28 megawatts.
Over the past 10 years, when the city lost a series of steam generators, and then had to remove other diesel generators considered non-compliant with rising environmental standards, Iola’s generating capacity fell to 22.5 megawatts.
To cover the shortfall, Iola pays Chanute and Sabetha anywhere between $80,000 and $100,000 annually for their excess capacity.
Concerns have arisen that Iola may lose that access in 2020 as Chanute renegotiates its electric production contracts, City Administrator Sid Fleming noted.
That gives Iola a few options, some of which are cost-prohibitive.
— The city could add a 10-megawatt generator like Iola’s pair of 5-megawatt Wartsila generators powered by natural gas, at a cost of $10 million to $12 million.
— Iola could do nothing, which would likely result in an immediate 60-percent increase in the city’s power purchasing costs, which would result in electric bills skyrocketing for consumers.
— Iola could look, as Osawatomie has done recently, in purchasing used diesel generators at a much cheaper cost than buying new.
Fleming sought the Council’s consensus to pursue the third option. He pegged the price at adding four 2-megawatt diesel generators at about $1.2 million to $1.8 million.
The city has about $1.3 million saved for electric generation purchases.
THERE are other factors to consider, Shreve noted.
Iola’s electric demands are lower today than they were in 2010 — industries like Haldex have closed up shop, after all — but the city must still account for potential growth.
“You always want to see a little bit of growth,” added Mike Phillips, power plant superintendent. “We’re going to see a new grocery store, and they’re adding a (Dollar General) in Gas. There will be a little bit of growth, but I’m not going to put my neck out and say it will be what it was in 2010.”
Fleming also noted consumers continually are seeking energy efficiency in their homes and businesses.
Iola also has the advantage of having the infrastructure for the old diesel generators already in place, Shreve added.
“We’d just slide the new generators back in the same holes.”
SHREVE noted that Iola, like its Southwind Power Pool partners in Chanute and Sabetha, could in turn sell its excess generating capacity if it adds 8 megawatts like Fleming suggested.
He declined to say how much Iola could recoup by doing so.