Coal, gas, solar, wind? Task force confronts burning issues

When talking about his work on the city’s Power Supply Task Force, Tom Baumgardner sounds more like he’s preparing for a street fight than helping formulate public policy.
  
“For a problem this size, it’s not going to be cheap,” said Baumgardner, a stockbroker with Edward Jones & Co. “We’re used to inexpensive power, and this is going to come as a real body blow to people.”
  
Baumgardner and the eight other task force members will be on the front line of what’s expected to be an acrimonious debate about supply and demand.
  
Should we spend $300-$400 million to replace coal-fired units at the city power plant when they are turned off in the coming years? How do we balance cost, reliability and environmental impact? When facing a 17 percent supply shortage, how much expensive renewable energy can we afford? Will voluntary programs or incentives to reduce energy consumption be enough, or should builders and landlords be required to provide more energy-efficient homes?
  
The Water & Light Department managed to run the city’s electric system without asking for a rate hike from 1983 to 1999, when the average bill went up 3 percent, but in recent years the energy system has become more expensive and complicated. The local coal plant provides the city with only 7 percent of its energy, so the city currently purchases most of its power supply from the owners of power plants in other parts of Missouri and in Illinois. The department estimates that those costs will increase by $13.2 million this year alone.
  
When it finally sinks in that the solution to Columbia’s power supply needs in future years will be quite costly and that renewable energy isn’t a panacea, the task force will face criticism from all directions, Baumgardner and other members said.
   
“It’s going to have capital costs that equate into user costs,” said John Conway, who runs a law firm and is chairman of the Power Supply Task Force.
  
Or as Baumgardner puts it, slightly more colorfully, “We’re going to have a lot of brickbats thrown at us.”
    
Some ratepayers have seen it coming, although it’s not as obvious as the price increases on gas station signs. Any business operator or homeowner who keeps close tabs on the monthly utility bill from the city knows the bottom line has been increasing steadily in the past several years.
    
The average rate went up 9 percent in fiscal year 2004, 8.5 percent in 2005, 8 percent in 2006, 9 percent in the last year and, if the forecast holds, nearly 10 percent in the year ending September 2008. Concurrently, costs to supply power have steadily escalated and will reach $70 million this year.
    
The number of customers has risen from about 40,000 in 2004 to nearly 44,000 and could surpass 55,000 in 2014.
  
If there is a bewitching year, 2014 will be it. That’s when Columbia’s coal-fired power plant units will be turned off, or “retired,” in utility management terms.
  
The engineering firm advising the task force, Burns and McDonnell, has started research for the energy plan, and it will be completed and presented at public hearings during the first quarter of 2008.
  
The process to meet Columbia’s growing energy demands is ongoing, but it took a big leap in 2005 when the city council decided to sign a contract with Peabody Energy to buy a portion of the electricity produced at the Prairie State Power Plant at the mouth of a coal mine in southern Illinois. But the city won’t start getting that 50 megawatts of constantly accessible power until 2011 when the plant starts burning that coal.
  
“These are the time frames we need to be thinking about,” said Dan Dasho, the outgoing Water & Light Department director. “These are very long processes.”
  
The city also renewed a contract with Ameren Illinois to tap into its coal and natural gas plants in Illinois. But here’s the catch: The cost, starting in June, will rise from less than $34 per megawatt hour to more than $50.
    
The Water & Light Department this year is stepping up its conservation programs and will increase its load management discount to 5 percent to encourage thrifty power consumption.
    
The city this year started buying electricity from a wind farm in northwestern Missouri, 6.3 megawatts worth, and just started operating the Biogas Plant at the landfill that will supply 2.1 megawatts of electricity. That puts the city well ahead of the pace required by voters who passed a referendum in 2004 requiring 2 percent of its supply of electricity to come from renewable resources by the end of this year. (The requirement increases to 5 percent in 2012, 10 percent in 2017 and 15 percent in 2022).
    
Currently the approximate costs of renewable energy are $50 per megawatt hour for landfill gas, with a limited supply, $70 for biomass, $55 for wind power and $420 for solar power (because wind and sunlight are relatively unreliable, only 20 percent counts toward the city’s capacity requirement). That compares with about $45 for coal power.
    
But is that vote on renewable energy in 2004 a harbinger of the sentiment that will face the city council when it decides how to equalize power demand and supply?
  
One of the task force members, Dick Parker, is a former professor of environmental studies at Southern Illinois University who provided a handout at the November meeting that set forth arguments that Columbia’s future power needs can be met without building or tapping into any additional power generators
    
At the Power Supply Task Force’s initial public hearing this month, speaker after speaker argued that the city should reject coal as a source and choose energy saving options and more renewable energy sources. One said he’d be willing to turn off his electricity for a few hours a day to help and others might support the voluntary brownouts. Several pointed out that Congress is likely to pass legislation that makes coal and natural gas production of electricity more expensive, either with a carbon tax or a cap-and-trade system.
  
Jim Windsor, the Water & Light Department’s rates and fiscal planning manager, sat in the back of the council chambers and hadn’t been planning to speak. But near the end he went to the microphone, said he was speaking as a private citizen, and called for a realistic approach to the problem.
  
Considering cost and reliability, the city can’t depend on wind and solar energy to meet its supply and will “need to burn something,” Windsor said. There already are many people in Columbia who need government assistance because they can’t pay their electrical bills, he pointed out.
  
Dick Malon, a task force member and former director of the Water & Light Department, said in an interview with CBT, “The issue that folks shouldn’t lose sight of is the cost.”
  
While conservation will help, particularly in the summer, when energy is the most expensive, Malon said the savings are limited. “People will do wonderful things for a few months, but when it comes down to the long haul we have to give them incentives. We can’t expect people to make huge sacrifices.”
    
Baumgardner said the main challenge they face boils down to one word: “tolerance.”
    
“The issue is complex; nobody is going to get a perfect fix.”