As the BLP looks beyond June 2020 and the closure of its coal-burning Sims plant, the municipal power provider will look to diversify its portfolio with wind, solar and other wholesale purchases, and quite likely another local generating resource to supplement these purchases.
The solar purchases represent a 25-year commitment for production of energy from yet-to-be-constructed facilities, in conjunction with 17 municipalities in the state through the Michigan Public Power Agency (MPPA).
The BLP would get about 10.5 megawatts (MW) of the total 110 MW of solar capacity produced at projects in Shiawassee County and either Lenawee County or Calhoun County. This portion of these projects is anticipated to generate about 20,000 MW-hours of energy annually, which is about 6.4 percent of the BLP’s current annual requirements.
BLP General Manager Dave Walters said the project could require as much as 600 acres for solar generation. The two projects individually will be among the largest solar facilities in Michigan, he said, and represent a significant renewable energy commitment by the public power communities involved.
The purchase is at a competitive price, Walters said — 4 cents per kilowatt-hour, with a built-in escalator of 2 percent each year. While some local generation will likely be part of the BLP’s plan for the future, purchasing through MPPA helps keep renewable energy and other sources affordable, he said.
It would take nearly 900 acres of solar panels to produce what the Sims plant currently produces in an average year, Walters said.
“Our desire is to diversify this supply to multiple locations, fuel sources and technologies,” he said. “A small community solar project would come at a much higher price. Economies of scale drive the price down.”
A plan for the future
The City Council passed a resolution in September giving the BLP direction on the closure of the Sims plant.
BLP Board Chairman Jack Smant wrote to the council in response to the resolution, explaining how the board is already acting to prepare for a future without the Sims plant.
The municipal utility is currently fulfilling two of the council’s directives: developing a plan for an integrated power supply in the absence of Sims and implementing a plan for a future energy source for the city’s downtown snowmelt system.
“For the most part of what the City Council has requested, we’re already doing,” Walters said.
The utility board expects to have a plan for future power supply finalized by the end of December. Its consultants, Burns and McDonnell, will be conducting community and business forums to get public input on the plan during the week of Nov. 5.
While the BLP is awaiting recommendations from the consultants, previous studies and internal evaluations have suggested a natural gas-fired plant using reciprocating internal combustion engines (R.I.C.E. units) to be the best for the BLP’s needs at the scale of its current system, Walters said.
The BLP plans to operate the downtown snowmelt system through the 2019-20 winter season, primarily using Sims for December through February, and supplementing it with the auxiliary boiler at the plant when Sims is not operational.
The auxiliary boiler is not a long-term solution, Walters said, and it has not always been reliable. It was designed to heat the building, he said, not power the city’s snowmelt system. The BLP developed this option for temporary use, as Sims reliability has been a problem in recent years.
Providing a long-term heat source for snowmelt will be part of the BLP’s plan moving forward.
“The auxiliary boiler does a pretty good job heating the building and streets if you don’t get 3 feet of snow or sub-zero temperatures,” Walters explained.
The BLP has recently invested in maintenance and repairs to the boiler to enhance its performance and reliability, he added.
The utility has also agreed to work within the subcommittee structure previously formed between the BLP board and the City Council.
The Sims plant requires a major maintenance overhaul every 4-5 years. The most recent was completed in 2015. The BLP has slated the closure of Sims to avoid the next required overhaul in 2020, as independent studies have revealed a need for more than $35 million in repairs, more than $15 million of which would require attention during the next overhaul.
The BLP Board has not allocated funds or begun preparations for an overhaul of Sims, or purchased fuel beyond the June 2020 date for the plant’s closure.
About 8 percent of the BLP’s power currently comes from renewable sources, with 6 percent from landfill gas units. The municipal utility has also purchased wind energy in development, and if the wind solar projects come to fruition, the BLP would be on track to reach 20 percent renewable energy by 2021.