Black & Veatch is the original design engineer for Sims III, and also provides ongoing monitoring of the plant.
Brad Saad, the firm’s operations and maintenance consultant, noted during his presentation that $35 million would be required for continued safe and reliable operation of Sims III beyond the next five years. If no action is taken, he said there’s a risk of possible equipment and/or catastrophic failure.
“It’s basically worn out,” Saad said. “The equipment is old and it just needs to be replaced.”
And Saad noted that replacement of equipment would just be in-kind replacement of what’s there, and not any modernization or upgrade of the plant.
The report recommends that the BLP invest $4.4 million in the short term to address issues related to safety of workers and plant operation, and any future investments in the plant to extend its life beyond 2020 be minimized in order to shut it down by June 2020. This move, analysts say, would allow the BLP to avoid the costs associated with repairs and overhauls, and compliance with new regulatory rules coming into play the next several years.
“Operating Unit III in its current condition for an extended period of time just doesn’t make much economic sense,” Saad said.
Saad noted that the closure would allow the municipal utility to provide more economical power options to its customers, including a mix of market electric purchases and a new local generation component.
“There’s much less-expensive options that Grand Haven can consider for replacement of its power supply,” he said. “Grand Haven is in a real good position right now.”
The study notes that if the BLP wants to own and control some of its own power generation, it is recommended that the utility consider smaller, flexible generation technologies such as aeroderivative gas turbines or reciprocating internal combustion engines. These technologies would give the BLP the flexibility to quickly come online and meet demand while minimizing reliance on external sources.
Sims staffing addressed
Also addressed at Thursday’s meeting was the issue of Sims staffing related to the power plant’s closure.
BLP Power Supply Manager Erik Booth noted that the June 2020 option is the best time for the plant to close from a staffing perspective.
Under normal circumstances, the plant would have 39 total employees, but it is currently at 27 total employees as the utility begins to transition to the June 2020 closure, Booth said. Once Sims is closed, and with a local generation component part of the future plan, he said there would likely be a total of 13 employees.
The transition can be made through staff attrition if production is ramped down over the next two years, Booth said. By 2020, three production employees will be retired, two will be eligible for retirement and seven production department employees will be eligible for retirement in the next 2-4 years, he noted.
There would also be opportunities for Sims workers to transition to other departments and roles at the BLP.
But if the plant’s life is extended beyond 2020, Booth said they would need to hire additional employees in order to ease the workload on the current staff. That would mean layoffs once the plant is eventually closed.
“Our employees are shouldering a huge workload to help the BLP with this transition,” Booth said. “Current staffing levels are not sustainable in the long term.”
June 28 Board of Directors Meeting Information