June 4, 2016
Missouri

Grain Belt Express strikes wind energy deal with 35 cities

By Danny Henley, Hannibal Courier-Post reporter | Posted Jun. 3, 2016 | www.hannibal.net

The proposed Grain Belt Express Clean Line project has a client lined up that is interested in purchasing some of the wind-generated power it is proposing to make available in the Show-Me State.

According to The Associated Press, The Missouri Joint Municipal Electric Utility Commission (MJMEUC), which represents municipal utilities that pool their resources to buy power, on Thursday signed an agreement for up to 200 megawatts of transmission space on the Grain Belt Express line. That infrastructure would carry electricity generated near Dodge City, in western Kansas, across northern Missouri and Illinois to a substation in Sullivan, Ind., with the only substation in Missouri located just west of Center.

According to a spokesman for MJMEUC, 35 of its 67 members are part of the contract to buy from 50 to 100 megawatts of space.

MJMEUC’s members in northeast Missouri include Hannibal, Palmyra and Monroe City.

The initial subscriber for MJMEUC is a group of 35 cities known as the Missouri Public Energy Pool (MoPEP) that procure all of their energy from MJMEUC. The MoPEP group includes both Palmyra and Monroe City, but not Hannibal.

According to MJMEUC its member-city utilities could secure wind energy at less than 3 cents per kilowatt hour for up to 25 years.

“I think it’s a great thing,” said Brent Abell, general superintendent of the Palmyra Board of Public Works. “Anything to keep costs down. That’s the ultimate key in the power industry, keeping our costs low enough to keep it affordable. It fills a void where we can get cheaper power.”

“We’ve heard rumblings that it was coming and it was a group decision to do it,” he said. “I think it’s a great thing if everything pans out the way it’s supposed to pan out. Sometimes things don’t pan out the way they seem, but I’m hoping it does and I think it will.”

In response to an e-mail inquiry, Bob Stevenson, general manager of the Hannibal Board of Public Works, indicated he is not surprised at the announced deal between MJMEUC and Clean Line Energy, adding he “would prefer that Hannibal was a participant.”

What impact, if any, will Thursday’s agreement have on the BPW’s stance regarding Grain Belt?

In late February, the BPW announced it was curtailing power-supply discussions with Clean Line Energy, which had been trying to woo the city of Hannibal for its support of the project with promises of electricity for as little as 2 cents per kilowatt hour (kwh). Residential customers of the BPW are paying just under 10 cents per kwh.

At the time, Stevenson said the decision had been made to “move forward with some caution as we observe developments between Clean Line Energy, some of our fellow municipal utilities around the state, and the Missouri Public Service Commission.”

Clean Line Energy has stepped up its efforts to find customers for the project since the Missouri Public Service Commission blocked the project last summer, saying the project wouldn’t benefit Missouri ratepayers.

It’s unclear what, if any, impact Thursday’s agreement may have on a reapplication by Clean Line Energy with the PSC.

“We heard the commission’s concerns loud and clear, and one of them was they wanted to know there were actual Missouri customers for the line, and we’ve now proven that out,” said Clean Line President Michael Skelly in The Associated Press story.

According to MJMEUC President and General Manager Duncan Kincheloe, the anticipated savings in electricity costs could amount to $10 million annually.

The contract between MJMEUC and Clean Line Energy would replace an electricity contract MJMEUC has with Dynegy coal plants set. That pact is set to expire in 2021, the year Grain Belt is supposed to be operational.

Overall, Clean Line Energy says it could deliver up to 500 megawatts of power in Missouri. The remaining 3,500 megawatts would be shipped east for sale.

Hannibal is no stranger to securing energy through MJMEUC. In 2007, the BPW entered into an agreement with the MJMEUC, which was taking an equity ownership position in the development of the Prairie State Energy Campus in southern Illinois.

Hannibal agreed to purchase 20 megawatts of power through MJMEUC, which had a 190 megawatt share of the power plant that was constructed at the mouth of a coal mine.

Up until now the BPW had been selling its Prairie State power on the open market at a loss. However, beginning on June 1, 2017, that energy will instead be brought to Hannibal to meet around 60 percent of the city’s power needs. The remainder of Hannibal’s power supply needs beginning in June 2017 will either be met through daily purchases on the open market or through securing additional power supply contracts.