Part 3 of 5 in a series
Since 2007, when the Hannibal Board of Public Works purchased a share of the coal-fired Prairie State power plant in southern Illinois, not a single watt of power from the facility has been used in Hannibal. That changes in 2017 when the BPW begins to self-manage its energy plan.
Previously the city had purchased its energy under the terms of a full requirements electric contract, which meant the BPW was obligated to buy all its power from a single provider, which since Jan. 1, 2009, had been Ameren Energy Marketing (AEM) until AEM was sold to Dynegy, a Texas utility doing business through a subsidiary - Illinois Power Marketing.
That exclusive agreement wasn’t a bad thing since Prairie State’s reliability was not its strong suit when it first became operational. However, in recent months the plant’s reliability has been improving. During the Nov. 22 meeting of the BPW Board it was noted that Unit One of the power plant’s twin turbines had a capacity factor in October of 97.9 percent. (Unit Two was not in operation during October as it was shutdown for a multi-week planned maintenance outage.) Over the past 12 months Unit One has had an average capacity factor of 77.6 percent, while Unit Two’s capacity factor average was 79 percent.
With the power plant becoming more reliable, the decision was made to stop selling the city of Hannibal’s 20 megawatts (MW) of Prairie State power on the open market at a loss, and instead bring it to America’s Hometown to help meet the city’s power needs.
Not only will Prairie State’s energy be utilized to keep lights glowing, the BPW’s partial ownership of the power plant will also pay dividends on another front — providing needed capacity.
Capacity, among other things, represents a community’s potential energy reserves. Under its Midwest Independent Transmission System Operator (MISO) obligation, the BPW must own or control enough capacity to cover its own peak load, plus 7.5 percent, which next year will amount to about 63 MW.
“Prairie State will provide between 16-18 MW in 2017 so we will need to find the balance of 45-47 MW,” estimated Bob Stevenson, general manager of the BPW, in a memo in May of this year.
Since that time the BPW has added additional capacity to lower the total amount of capacity the city will need for the year 2017. Any shortage of capacity will be purchased by the BPW during MISO’s annual capacity auction in March.
Prairie State payoff
While Prairie State is frequently cited as a money-losing venture, which it was early on when the BPW was required to begin making payments before the plant began generating any electricity, it is now a benefit to the BPW budget.
During the November meeting of the BPW Board, Finance Director Abe Gray reported that when 2016 is compared 2015, the Electric Fund was enjoying a “positive variance” thanks to net results seen at Prairie State.
Bob Stevenson, general manager of the BPW, points out that Prairie State’s boost to the BPW budget “speaks mostly to our budgeting process which was more conservative than previous years with respect to projected Prairie State costs and revenues.”
Reach reporter Danny Henley at email@example.com