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15 Missouri communities served by Sho-Me Power forced to look for new power supply

News-Leader |Chad Livengood|January 24, 2010
MissouriGeneral

Proposals in Congress to rein in carbon dioxide emissions believed to be contributing to man-made global climate change have brought any plans to build or invest in new coal-burning power plants to a halt. "Looking 20 years out, it gets very difficult to do that in today's environment," Hartman said. "It's an uncertain future on coal and it takes a few years to build (a plant)."


Co-op scaling back on selling electricity

In late spring, 100 turbines at the state's fourth wind farm in northwest Missouri will start going online, almost doubling the output of the other three farms combined.

The electricity will flow across the grid to the customers of Springfield-based Associated Electric Cooperative Inc., which serves 51 cooperatives across rural Missouri, Iowa and Oklahoma.

But after 2013, the wind-generated power likely won't flow into homes and businesses in Cabool, Mansfield, Waynesville and a dozen other small communities across southern Missouri.

Marshfield-based Sho-Me Power sent notices to the 15 communities in December saying it can no longer sell them electricity after Christmas of 2013 on a long-term basis.

"Getting electricity to our co-ops is our priority; that's who owns us," said Jerry Hartman, manager of administrative services for Sho-Me Power.

Associated Electric, which sells power wholesale to Sho-Me Power, is scaling back on selling electricity to municipal utilities because of an uncertain future in generating additional ... more [truncated due to possible copyright]

     

Co-op scaling back on selling electricity

In late spring, 100 turbines at the state's fourth wind farm in northwest Missouri will start going online, almost doubling the output of the other three farms combined.

The electricity will flow across the grid to the customers of Springfield-based Associated Electric Cooperative Inc., which serves 51 cooperatives across rural Missouri, Iowa and Oklahoma.

But after 2013, the wind-generated power likely won't flow into homes and businesses in Cabool, Mansfield, Waynesville and a dozen other small communities across southern Missouri.

Marshfield-based Sho-Me Power sent notices to the 15 communities in December saying it can no longer sell them electricity after Christmas of 2013 on a long-term basis.

"Getting electricity to our co-ops is our priority; that's who owns us," said Jerry Hartman, manager of administrative services for Sho-Me Power.

Associated Electric, which sells power wholesale to Sho-Me Power, is scaling back on selling electricity to municipal utilities because of an uncertain future in generating additional energy, said spokeswoman Nancy Southworth.

Proposals in Congress to rein in carbon dioxide emissions believed to be contributing to man-made global climate change have brought any plans to build or invest in new coal-burning power plants to a halt.

"Looking 20 years out, it gets very difficult to do that in today's environment," Hartman said. "It's an uncertain future on coal and it takes a few years to build (a plant)."

The clean energy legislation, known as cap and trade, passed the U.S. House last summer but remains held up in the Senate as lawmakers weigh the benefits against possible job losses.

Higher costs

Although the new wind farm in DeKalb County will increase the percentage of power Associated Electric gets from wind from 1 percent to 4 percent, it won't be enough for sustainable growth into the future.

"It would take a lot more wind turbines ... to ever come close" to the demand, Southworth said.

Plus, burning fossil fuels remains less expensive for generating cheap electricity than alternative energy sources. The cap-and-trade legislation in Congress would dedicate more federal subsidies to developing alternative energy sources while making it more costly to burn coal for electricity generation.

While the source of wind power is free, wind and other alternative energy sources "cannot produce electricity that can be sold at reasonable rates, especially with carbon legislation pending in Congress," according to a Dec. 28 letter Sho-Me Power sent to the city of Houston.

In March 2008, Associated Electric suspended indefinitely plans to build a new 660-megawatt coal-fired power plant near Norborne after cost estimates reached $2 billion and financing dried up. Increased environmental regulation also was cited as a factor in all but abandoning the project.

Sho-Me Power said it was exercising a termination clause in its contract that called for three years advance notice. Without doing so, the power cooperative would have had to continue supplying power to Houston until 2033, according to a copy of the letter obtained by the News-Leader.

But losing Sho-Me Power will likely result in higher electricity rates from wholesale suppliers in other parts of Missouri or out-of-state, officials said.

"What I can see as the biggest detriment to the city is our power costs will -- I'm sure -- be much higher," said Larry Sutton, city administrator for Houston.

Since Sho-Me Power still owns the power lines that run into the 15 cities, the municipalities will have to pay Sho-Me for transmission costs as well.

"Sho-Me is going to make money on it, even if they don't sell us anything," Sutton said.

Changing suppliers

Sho-Me Power's existing nine cooperatives across southern Missouri will not accept any of the municipalities into their systems, Hartman said.

State Sen. Frank Barnitz, a Dent County Democrat, is organizing a meeting next week of officials from affected towns to assess their options for new power sources.

"Even though we've got three years before the actual termination date of this, three years can creep up on you real quickly," said Alan Clark, city administrator for St. Robert. "We've got to find an energy supplier that's going to give us some economical rates for our residents."

St. Robert and Waynesville are among the affected communities. Fort Leonard Wood purchases electricity from Sho-Me Power but is involved in a separate contract and exempted from the shut-off notices, Hartman said.

Clark worries that even the perception of St. Robert not having a long-term power supplier could hurt the growing Pulaski County community's economic development.

"The last thing I want to do is have a developer think he's not going to have electric power because of the situation with Sho-Me right now," Clark said.

One source of power for the 12 communities is a cooperative setup, managed by the Missouri Association of Municipal Utilities.

In its 10th year, the Missouri Public Energy Pool has 35 cities -- including Rolla -- that pool resources and invest in generating facilities in Missouri, Illinois and Arkansas, said Ewell Lawson, a lobbyist for the state's municipal utilities.

Ava recently stopped buying power from Sho-Me Power in favor of joining MOPEP, and Lebanon is scheduled to switch to MOPEP on April 1, Lawson said.

Lebanon decided to switch before getting an expected shut-off notice from Sho-Me Power, said Kevin Barber, electric department supervisor for city of Lebanon.

"They weren't telling us they were going to kick us off the system, but they hinted to us that we should start looking," Barber said.

The cities also could pool resources and negotiate for bulk power on their own, Barnitz said.

Barnitz said Associated Electric's inability to continue serving the municipalities shines light on the state's lack of a long-term and affordable energy source if burning coal is discouraged because of the high levels of pollution emitted.

"You're up against the environmental crowd that is just hellbent against any coal," Barnitz said. "We have to look at it from a standpoint of reliability of power."

Additional Facts - Towns affected

Sho-Me Power Electric Cooperative in Marshfield plans to stop selling electricity to the following Missouri cities after 2013:

- Cabool
- Cuba
- Houston
- Mansfield
- Mountain View
- Newburg
- Richland
- Salem
- Seymour
- St. Robert
- Steelville
- Sullivan
- Waynesville
- Willow Springs
- Winona


Source:http://www.news-leader.com/ap…

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