Still no action on proposed coal contract | SierraSun.com

Still no action on proposed coal contract

Christine Stanley
Sierra Sun

The Truckee Donner Public Utility District board heard a second round of public comment Wednesday night regarding the district’s desire to purchase energy from, and ownership interests in, a coal-fired power plant in Utah. The board did not take action on the contract.

Dozens of residents voiced concern about the 50-year length of the proposed contract, while others opposed reliance on coal, and still a minority urged the board to go forward with the plan.

“My hope was that we would find a win-win or a collaborative solution, but at the end of the day I didn’t see much movement to a middle scenario,” said board president Ron Hemig.

Public comment lasted nearly four hours. Electric Utility Manager Stephen Hollabaugh gave a presentation on options for the district’s power portfolio, and Utah Associated Municipal Power Systems (UAMPS) General Manager Douglas Hunter was present to answer questions from ratepayers and the board.

Utility board members and staff have received hundreds of e-mails and phone calls in the past few weeks urging them to reject locking the district into a 50-year contract with the Utah plant, with the period of agreement beginning in 2012.

Input from correspondence, as well as that voiced at public meetings, has been successful in changing the opinion of some board members regarding the contract’s potential for success.

“I’m against it and I don’t see that there is anything right now that is going to change my mind,” said board member Bill Thomason. “Coal is not the issue to me. To me, it’s money and time. I don’t want to get locked in again to a long contract. There are so many things out there that can happen in 50 years.”

Still, other board members remain very concerned about the financial ramifications of letting this contract slip away.

If the board signs with UAMPS, it will receive a fixed amount of power to serve Truckee’s minimum daily need at a rate of $35 to $40 per megawatt hour (MWh), a decidedly better deal than the roughly $70 per MWh that the district would pay should they nix the UAMPS contract to purchase five-year power contracts on the open market.

“There is risk in any scenario, but the cost-based approach gives us control with some certainly,” Hemig said. “But taking our chances in the power market every five years is very risky as supported by our history in securing power contracts. There’s always other options, but the certainty is not there, so you come down to hope, and hope is not a good strategy.”

Hemig and Hollabaugh have also been waving red flags at local coal opponents who are demanding that the district turn away from coal all together. The president and utility manager have been adamant that no matter what the outcome of the UAMPS contract, coal power is still going to be the primary energy resource for Truckee.

Adding to the complexity of the debate is Senate Bill 1368, which will limit the terms of coal and non-green power contracts to five years or less, beginning in January 2007. In order to avoid the legislation’s restrictions, the board must sign the contract this month.

“There is a reason for them making it illegal, so it bothers me as a responsible person to go forward with this contract right now,” Thomason said.

The Truckee Donner Public Utility District board will take action on the proposed contract with Utah Associated Municipal Power Systems at a special meeting Dec. 13 at 7 p.m. at the Truckee Donner Public Utility District.