After expressing public interest for months in securing low-cost wind energy, the Hannibal Board of Public Works Board took the next step Wednesday by approving a draft power purchase agreement to get wind energy from an an as of yet unapproved transmission line.

After expressing public interest for months in securing low-cost wind energy, the Hannibal Board of Public Works Board took the next step Wednesday by approving a draft power purchase agreement to get wind energy from an an as of yet unapproved transmission line.

Bob Stevenson, general manager of the HBPW, noted that the contact being approved still contains some gaps.

“It's not complete. This is a work in progress that we've taken as far as we can go,” he said.

Still, Stevenson stopped short of calling it a “tentative” agreement.

“The word tentative is not in the agreement. This is a real commitment to us. That's how we intend to pursue it,” he said. “But we all realize that things can happen yet through rulings or studies where we might find a show-stopper type of condition. We reserve the right to go back and re-think (the situation). If nothing changes of any significance they would expect us to sign this deal and live by it.”

The HBPW Board was asked to sign the draft agreement as a show of support for both the Missouri Joint Municipal Electric Utility Commission (MJMEUC) and Clean Line Energy as they prepare their testimony to the Missouri Public Service Commission seeking approval to construct the Grain Belt Express transmission line from wind farms in western Kansas, across Missouri, to the Hannibal area.

Among the blanks on the contract is the price Hannibal will be paying for the wind-generated power.

“The initial price for the energy and transmission service is still confidential. Those prices will be revealed to the public during Public Service Commission testimony. We are satisfied they are going to be in the $21 a megawatt (MW) range when they are finally revealed, or less,” said Stevenson.

By comparison, the city is currently paying $41.69 per megawatt hour (MWh). That power-supply contract ends at the end of May 31, 2017.

Some aspects of the draft contract that are known:

• The amount of power the city will be buying.

“We are committing to a maximum of 15 MW of transmission capacity and all the energy that capacity could produce from that wind farm. Our estimate of that is about 70,000 MWh annually,” said Stevenson.

• The amount of capacity that would be credited to Hannibal.

“That will amount to about 2 MW of certified capacity that we can use to work down our obligation of 60 MW of capacity every year. It will help a little bit, but not much,” said Stevenson.

• The duration of the contract.

“This is for an initial term of 20 years, which starts at the completion of the transmission line, with an option to extend it another five years, at our choice, at the same terms,” said Stevenson.

While the HBPW has an agreement in hand, it will also have the opportunity to walk away without any financial penalties up to 90 days before commercial operation of the transmission line begins, according to Stevenson.

“It looks to me like the risk in this for Hannibal is very low,” said the HBPW's GM. “It would be more difficult to change our mind and buy more (energy).”

Stevenson did acknowledge there is one “point of risk for the city.”

“In the event that the transmission line is completed and the wind generators are for some reason late and can't deliver energy, this contract obliges us to start paying for the transmission service anyway,” he said.

Stevenson is not losing sleep over that possibility.

“The odds of the particular generators that would be assigned to us being late are very low,” he said.

A liquidated damages clause is written into the contract to pay those transmission charges should the wind generators be late.

Reach reporter Danny Henley at danny.henley@courierpost.com