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Weighing their options

Becky Vargo • Apr 13, 2018 at 8:00 AM

The Grand Haven Board of Light and Power’s Sims III Plant on Harbor Island has served its purpose and now it’s time to move on to other energy sources, say staff at the city power utility.

They hope the community agrees with them and that the BLP Board of Trustees and Grand Haven City Council give staff the green light to proceed with a June 2020 shutdown of the coal-powered plant.

The other option is to sink a minimum of $15.5 million into the facility to keep it running for another five years.

BLP General Manager David Walters and Power Supply Manager Erik Booth gave presentations on the status of the 35-year-old power plant and potential options on Thursday, during the second of several educational forums planned in the upcoming months.

The first meeting was held with the top 10 customers that represented 50 percent of the utility’s business. The meeting on Thursday involved the next 5 percent of the power users, including businesses like Home Depot.

While noting there were a lot of options for keeping the BLP customers supplied with power and the company remaining a public utility, Walters said they didn’t want to go into a lot of detail about next steps until they are given direction on which way the utility will proceed.

If it’s decided to close the plant, staff would optimize Sims to extend its life to 2020. This optimization would include longer shutdown periods in the fall and spring, and the plant would run at reduced workloads. 

Work would continue on a multi-year project to complete upgrades to the transmission system infrastructure by fall 2019, allowing the BLP to adequately obtain enough power from the grid in 2020.

Last year, the utility spent roughly $2 million to upgrade the lines from a substation near Robbins Road, down Ferry Street and back to Harbor Island.

“It’s a complete rebuild,” said Rob Shelley, BLP distribution and engineering manager. “It’s new poles and new wire.”

Shelley said the new transmission lines can handle roughly three times more load than the old ones, and noted that lots of the existing lines were erected in the 1960s.

“It’s because of the age and the size – why we’re doing it,” he said.

Crews are currently visible on Harbor Island doing the second $2 million phase of the upgrade, replacing lines and poles from the Harbor Island substation to the VanWagoner Road substation.

Shelley said next year, crews will do the work between the VanWagoner Road and Sternberg Road substations.

This is the work that will allow the BLP to acquire enough power off the grid, if the current power plant is shut down, Shelley said.

There’s also work happening on the distribution side, he added.

Those projects aren’t as visible because they are smaller and confined mostly to neighborhoods, Shelley said.

“We are spending millions of dollars every year on maintenance and upgrades,” he said.

Crews have been working this week along West Spring Lake Road and on Glendale Circle, Shelley said. In the coming months, crews will work in the core of the city of Grand Haven.

This work includes replacing poles, transformers, wires – both primary and secondary, crossbars and drops to people’s homes as needed, Shelley said.

Walters said the BLP has switched its emphasis from the facility to the transmission and distribution lines to make sure the community continues to receive power, whether it comes from a local plant or from the grid.

For people worried about the reliability of the grid, he noted the BLP has three connections to it. He also noted that Grand Haven is getting its power off the grid almost 50 percent of time.

That’s because the Sims plant has to be run at full capacity to be efficient, so they only run it part of the time in order to keep it running for the next few years.

Walters told the group at Thursday’s forum that the Sims plant has been down for a month.

The Sims III facility has a 70-megawatt capacity and the average load is currently 35 megawatts, Walters said. Peak load, in the summer, is 60-70 megawatts.

“The problem is, we don’t peak a lot,” Walters said.

He noted when times were good, the plant operated at peak and sold power to the grid. That was in 2001.

“We did pretty well,” Walters said.

Between 2001-2005, there was consistent use and rates did not change.

Walters said the economy started to tank in 2006, and they had six years of decreased demand. Coal prices went up and so did rates.

In 2010, an annual $1.5 million payment from a power pool ended when the pool disbanded. The BLP was forced to go to the market to sell power and were not able to do so.

Walter said it got to the point that it was cheaper to buy power from the market than to generate it locally.

What utility officials hope to do is create a portfolio where power is purchased from several different companies and power sources. They also propose to build a much smaller gas power plant as a backup.

Power Supply Manager Erik Booth said the residents of Grand Haven have an opportunity to upgrade to a cleaner, more efficient system that could be good for the next 35-40 years.

Booth recently went through the process with the power company that serves Marquette.

He promotes a controlled process to a shut down, rather than sticking extra money into the aging plant and “waiting until it breaks.”

With a plan, they can cut back on coal purchase and not be stuck with a lot of extra inventory. 

He also noted that, with the natural staff turnover of 35 percent, a shutdown in 2020 would have minimal impact on the workforce at the plant.

In answer to questions, Walters said they would recommend tearing down the Sims plant before building a new plant. 

The costs of teardown and site remediation could be combined into a bond for a new plant, but those figures wouldn’t be determined unless staff is told to go in that direction, Walters said.

“The Board does not want us to build one plant to cover all your power needs,” Walters said.

The general manager said they needed to diversify and not “put all our eggs in one basket. No one does that.”

When asked if the BLP would erect a solar system, Walters said they would put one in if directed. But he said it makes more sense to buy it cheaper from a larger, existing facility. 

“You have to look at land cost, construction cost, how to connect to the grid and how much sun you get,” he said.

Walters said the utility would need 700 acres of solar to supply power needed by the BLP customers. 

Reliability of the grid

Walters said there is always a possibility of losing the grid, but that hasn’t happened once in the past eight years.

It’s because of that slight possibility that they are proposing to build a backup plant.

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