Hillsboro council renews ties with KPP energy group

The Hillsboro City Coun?cil continued the city?s participation in the Kansas Power Pool after approving new organizational documents for the municipal energy agency during the council?s April 21 meeting.

KPP operates as an energy broker for its member cities with the intent of securing lower energy prices for the member municipalities by negotiating for quan?tity discounts.

KPP currently lists 31 member cities, although not all currently purchase power through the agency.

City Administrator Larry Paine compared the changes in the organizational documents to the 13 American colonies moving from the Articles of Confederation to adopting the Constitution.

?In the beginning, we were all member cities, and we met every month and we voted on each and every item of business that went on,? he said. ?Now they?ve created a nine-member board that actually does the business of the power pool.

?KPP has been growing from its inception about 12 years ago to today?the structure of what was good then doesn?t meet the need of the way the organization is being run now,? he added.

Each member city will need to approve the new documents before they become official, he added.

The council approved both Resolution 2015-10, which deals with the documents, and Resolution 2015-11, addressing the city?s continuing participation in KPP by 3-0 votes.

Councilor Bob Watson was absent.

KPP update

Unrelated to those two agenda items, Mark Chesney, CEO and general manager, was at the meeting to update the council on recent KPP contracts that should help lower the cost of energy to member cities.

Chesney highlighted a recent deal for 25 megawatts with RPM Access, developers of a wind project in Barton County that should come on line around Jan. 1.

Chesney said he could not release the price, but, ?I can tell you it is absolutely priced right. It?s slightly less than the market price and it?s fixed for 20 years.?

Chesney said the contract represents about 8 percent of KPP?s total power load. Paine added that it?s roughly 31?2 times the peak load used by the city of Hillsboro in mid-summer.

With that contract, Ches?ney said KPP is close to meeting the Renewable Portfolio Standard, a regulation that requires the increased production of energy from renewable sources with a goal of reaching 20 percent of a company?s portfolio by 2020.

?We do have a pretty diverse fuel supply,? he said. ?Natural gas, wind, hydro, coal?and less coal soon.?

Chesney also highlighted KPP?s termination of a contract with the coal-fired Nearman Creek Power Plant operated by the Kan?sas City Board of Public Utilities.

To replace it, KPP has signed a letter of intent to acquire 20 megawatts from Dogwood Energy, a natural gas-fired, combined-cycle electricity-generation facility in Missouri.

?We?re going to buy 20 megawatts of Dogwood for less than what we?ve been paying for 16 megawatts from Nearman,? Chesney said.

?We feel good about that,? he added. ?Nearman has under performed. It is a coal-fire plant, but the way it operates, it clearly has been our most expensive resource (for power).

At the end of Chesney?s comments, Councilor Dave Loewen said, ?Keeping electrical costs down is nice so we can pass the savings along to our customers, that?s for sure.?