To maintain the timeline to close the Blue Valley power plant in mid-June 2020, the Independence City Council must make a decision soon on replacement power.
Two weeks ago, a council majority turned down the staff and Public Utilities Advisory Board recommendation for a 20-year contract for 45 megawatts of capacity power from Oneta Power, a natural gas plant in Oklahoma. Before that, a majority approved an amended resolution a “best-and-final” offer for an additional 46-megawatt ownership share in the gas-fired Dogwood plant in Pleasant Hill.
Either one would be enough to cover Power & Light's commitment with the Southwest Power Pool – the city's power broker that covers much of middle America and allows IPL to purchase power at lower wholesale prices. On Monday's council agenda Council Member Scott Roberson is taking another chance with Oneta, as he requested a resolution for a 10-year contract at $15.25 million. There was no agenda item for a Dogwood contract Friday.
Rob Janssen from Dogwood's ownership group spoke to the council during a hearing for the Oneta contract, saying that Dogwood could offer a better contract than before thanks to maintenance improvements that officials project will give the plant a longer and better lifespan – and give IPL a lower annual cost.
At this past Monday's meeting, Burns & McDonnell consultants reiterated their findings that Oneta represented the best offer for IPL, though its recommendation for nothing more than a 2 percent rate cut had been rendered moot by the council's earlier decision to implement a 4 percent rate cut later this year.
Roberson said Dogwood's revised offer wasn't better by simply extending the plant's life, echoing correspondence that Nathan Hanson, a vice president at LS Power, which owns Oneta, sent to the council last week. Oneta said Dogwood didn't account for capital improvements that would be necessary to increase efficiency – making Oneta's offer still better.
“The numbers speak for themselves,” Roberson said. “They compared everything to Dogwood because it was a known quantity.”
“We pay the experts to run the numbers, and they're telling us what the numbers are saying. If buy Dogwood, we buy it for life of plant, no way of getting out of it.”
The city's current Dogwood ownership share of more than 12 percent accounts for 75 megawatts. The proposed 46 megawatts would bring the city's ownership share to nearly 20 percent.
Roberson has said IPL doesn't need the energy that would be part of Dogwood ownership – just the capacity.
“We have enough power through our other contracts to cover IPL customers,” he said.
Only Roberson and Mayor Eileen Weir voted for the Oneta contract two weeks ago after Roberson received no support to amend the contract to 10 years. Roberson and Council Member Curt Dougherty voted against the resolution for Dogwood's offer. Karen DeLuccie was out of town on family business and unable to join the meeting via video feed.
While the council has not wavered on closing Blue Valley, it still must replace a portion of the plant's 98-megawatt capacity to fulfill its obligation with the Southwest Power Pool – that is, it must maintain capacity of 12 percent above peak demand. SPP evaluates proposed transmission changes each July and January, and the city would need to submit a proposed change in June to issue the required six-month notice of transmission change (if it were to close Blue Valley) in November.
Power & Light could be asked to pay transmission cost upgrades with either Oneta or Dogwood contract.
The council could vote Monday to put a use tax back on the ballot for Aug. 6. Voters soundly rejected last year's attempt to approve 2.25 tax for online retail sales, matching the city sales taxes at brick-and-mortar retail. Unlike last year's tax request, which had revenues going into the general fund, Proposition P earmarks revenues at a 50-50 split for animal shelter operations and police officers, and funds would be monitored by citizen oversight committees.
Roberson has proposed an amendment to the use tax ordinance, asking that after the animal shelter and police department receive necessary funds as intended, then excess funds would flow into the general fund. Roberson said that if the use tax passes, he doesn't want future councils and city managers to be hand-tied.
“I believe it will increase in the future,” he said of use tax funds. “I'm just trying to look 5-10 years down the road. It is desperately needed for those now.”
The city has approved a two-year agreement with the county to take over operation of Regional Animal Shelter in July. The county, whose selected contractor Great Plains SPCA seemed to catch many off-guard in January when it gave its six-month notice to leave, citing financial constraints, still must approve the contract.
The agenda also includes two items on smart meters. One is a second reading to put the smart meter question to voters on the Aug. 6 ballot, after citizens gathered enough signatures to petition for such a ballot measure. The second item is a first reading to simply prohibit smart meters in lieu of a citizen vote, something the council is permitted to do by the City Charter. If the council passes the second item, it could only vote to repeal it no sooner than a year later.