Considering future needs from a variety of sources, the City of New Ulm/Public Utilities (NUPUC) Long-Term Power Committee unanimously approved a resolution Tuesday authorizing staff to consider a 5 Megawatt (MW) local wind farm.
Preliminary staff analysis showed a local wind project would be feasible by the Fort Ridgely substation, located in Nicollet County, west of Klossner.
If Clean, Renewable Energy Bonds (CREBS) are obtained for the entire local wind project, which are currently proposed federal legislation, it could be financed at zero percent interest for 20 years.
A local wind project would require NUPUC to build a transmission line, estimated to cost another $5 per MW hour. Average power cost was estimated at $42.50 per MW hour.
If CREBs are obtained for one of three wind turbine units, likely under current award method, 3.5 percent municipal bonds could be used to finance the remaining project. Average power cost was estimated at $50.10 per MW hour.
Without CREBs, the project could be financed with five percent municipal bonds. Average power cost estimate was $53.90 per MW hour.
Recommended by Public Utilities Director Gary Gleisner, the resolution included a Power Purchase Agreement (PPA) for 10 per MW hour of wind power from an another source.
Utility Planning and Development Engineer Patrick Wrase said three 1.65 MW turbines are available now. He estimated the earliest local wind farm start-up date at fall 2008.
Wrase said three PPA proposals have been received and are being reviewed. Costs range from $52.88 to $63 per MW hour.
“It seems prudent to look at a wind project considering state renewable energy mandates,” Citizen Appointee Tom Hendel said.
“Don’t put all your eggs in one basket,” added City Councilor Ruth Webster.
Boiler No. 4 conversion to coal/biomass options including Powder River Basin Coal via the Dakota, Minnesota and Eastern Railroad, refuse-derived fuel (RDF) and processed corn stover are being considered by the Committee.
Coal storage site options the Committee is considering include a mined-out section of New Ulm Quartzite Quarries Inc., located between New Ulm and Courtland.
A processed refuse supplier, LJP of St. Peter offered to pay the City $20 a ton to take the fuel to burn. The new boiler could burn up to 30 percent RDF to help decrease fuel costs.
Wrase said RDF doesn’t have the energy content a piece of coal does but it could be blown into the boiler. Pelletizing the RDF would make it more usable and cost about $40/ton, roughly equal to ore slightly cheaper than what big power plants pay for coal.
Wrase said he was contacted by Sunrise Agri-fuels of Bird Island about the prospect of purchasing biofuel pellets made of soybean residue and corn stover.
“It costs more than the other options right now, but we’ll keep them on the contact list,” Wrase added.
Wrase said the Heartland Community Power District of Huron, S.D., is willing to work with the City on a local wind project.
The next Committee meeting was tentatively set for 4 p.m., Tuesday, April 24 in the PUC Conference Room.
By Fritz Busch
Journal Staff Writer
28 March 2007
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