Hannibal now poised to be part of wind energy project.
If the Missouri Public Service Commission (MPSC) approves Clean Line Energy's proposed wind energy project, among the Missouri communities now in position to receive a portion of that power is Hannibal.
On Tuesday, both the Board of Public Works (HBPW) Board and City Council approved the final draft of an agreement between the city of Hannibal and the Missouri Joint Municipal Electric Utility Commission (MJMEUC), allowing Hannibal to purchase wind energy and associated transmission service through that state joint action agency.
The HBPW Board approved the contract unanimously - 4-0. The Council voted 6-0. Councilman Jamie Locke was absent.
Initially the city would pay $16.50 MWh for energy and $4.81 MWh for transmission. Built into the contract is an annual escalation factor of 2 percent. The contract runs for 20 years, but includes an option for five additional years.
“The prices of this energy and transmission are set by contract for the 20-25 year life of the project,” wrote Bob Stevenson, general manager of the HBPW, in a memo to the Board and Council. “There is no risk of higher construction costs as with the Prairie State Energy Campus contract from a decade ago. The only risk is if the project is not completed and no energy delivered. In such case we will be out some legal fees and minor administrative costs to develop these contracts but nothing else.”
Under the contract Hannibal will receive a maximum of 15 MW of transmission capacity and all the energy that capacity could produce from that wind farm. It is estimated that will amount to about 70,000 MWh annually, or one-quarter of the city's energy needs.
The initial rate the city will be paying for wind energy — $21.31 MWh — is far below what energy is selling for on the open market — around $40 MWh — and what energy from Prairie State costs Hannibal — about $60 MWh.
Noting the price differences, City Manager Jeff LaGarce asked if a bigger piece of the “power pie” could still be purchased. Stevenson said more wind energy might be available, but not at the bargain-basement price which was only offered so Clean Line could line up Missouri customers when it again went before the MPSC this week.
“Clean Line is very dependent on us and the other municipals approving this contract. Without us they've got nothing and they won't get anything built,” said Stevenson to his board on Tuesday.
In July 2016, the City Council authorized the HBPW to negotiate with the MJMEUC if another opportunity to purchase wind-generated power presented itself. MJMEUC announced a contract with Clean Line Energy Partners (CLEP) for up to 200 MW of DC transmission service in early June of 2016.
On Feb. 8 the HBPW Board approved a draft power purchase agreement, which was termed a show of support for both MJMEUC and Clean Line Energy as they prepared their testimony to the MPSC seeking its approval to construct the transmission line from wind farms in western Kansas, across Missouri, to the Hannibal area.
If the MPSC grants the Certificate of Convenience and Need required for construction to commence, it is estimated it would take four years for any wind energy to reach Hannibal.
Reach reporter Danny Henley at firstname.lastname@example.org