News & Information

Consultant addresses Sims plant report at BLP meeting

Article by Alex Doty- Grand Haven Tribune

The consultant tasked with evaluating the Board of Light & Power’s 35-year-old Sims III generating station on Harbor Island attended Thursday afternoon’s BLP board meeting to address the firm’s recently released report, which notes a large investment is needed over the next several years to keep the coal-fired plant safe and reliable.

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

Falcon Chicks Banded at Sims

Michigan Department of Natural Resources officials say it was much easier this year to band three male peregrine falcon chicks nesting 240 feet up on the Grand Haven Board of Light & Power’s emissions stack on Harbor Island.

“They treated us much better this year,” DNR wildlife biologist Nik Kalejs said. “Last year maybe was an outlier. Last year, she (mother falcon) was just fighting mad and went after everybody hard. It just makes it harder to concentrate on what you’re doing because your head is on a swivel looking around to make sure she doesn’t come around the curve of the stack and whack you.”
All three of the males produced at the nest box this year appeared healthy, DNR officials said.

“We thought at first one might be a female because the females are a little bit larger,” Kalejs said. “We tried a female band first, and it was so big and so much play on it that the male band fit much better.”

Kalejs noted that this year’s banding occurred later in the season than prior years. In 2017, the falcon chicks were banded in early June.

“It is certainly outside of the normal time frame we’ve seen with Grand Haven birds,” he said.

The wintry weather seen around Grand Haven this past spring could have had an effect on the reproduction process, Kalejs noted.

“We had some weird weather in April,” he said. “It could be something as simple as an aberration in the weather patterns from what we’ve seen in recent years.”

To date, the Grand Haven nest site has produced 45 peregrine falcon chicks — 25 females and 20 males — noted BLP Administrative Services Manager Renee Molyneux. The first chicks reproduced in the box were back in 2001.

Peregrine falcons were listed as an endangered species by the U.S. Fish and Wildlife Service in 1970, after their Midwest population was eliminated in the mid-1960s due to problems with the pesticide DDT. In 1999, following extensive restoration efforts, the peregrine was removed from the federally endangered species list, but it remains on the Michigan endangered species list.

Earlier this year, Kalejs banded three falcon chicks at the Consumers Energy J.H. Campbell Generating Complex in Port Sheldon Township. The three birds banded at the Consumers plant brought the total to 42 chicks that have hatched there since 2004.

There were also falcons banded at nesting sites in Grand Rapids, where boxes are located at Grand Valley State University and the Kent County Courthouse.

Article from Grand Haven Tribune, Alex Doty

BLP Adopts fy 2019 Business Plan – CUSTOMER CHARGES stable

Grand Haven, Wednesday, May 23, 2018 — Grand Haven Board of Light & Power’s Board of Directors adopted a business plan for Fiscal Year 2019 at its Thursday, May 17 meeting.  The Business Plan is comprised of the annual budget and long-term capital improvement plan.  Base customer rates are being held constant with those set on July 1, 2016; however, changes in fuel related expenses and purchase power costs will be passed on directly to customers through the Power Cost Adjustment (PCA) contained in each customer rate category during the coming year.

General Manager David Walters stated, “The FY 2019 budget is a status quo budget that is consistent with the Board’s action and direction taken at their April 24, 2018 meeting to cease operations of the Sims Power Plant on June 1, 2020.” The budget incorporates a power plant operating and maintenance schedule, coal deliveries, and wholesale power purchases consistent with a June 2020 plant closure.  Additionally, the budget for next year and the longer-term capital plan includes only minimal “life extension” plant improvements at Sims, those deemed necessary before 2020.  If the Sims plant is required to run longer, additional revenues will be required to pay for these improvements.  Annual coal costs are increasing in Fiscal Year 2019, primarily attributed to an increase in lake-vessel transportation costs. The projected increase in retail sales volume is estimated 1% above FY 2018.

Total retail revenues to BLP customers averaged approximately 13 cents per kWh during fiscal years 2015 and 2016.  These charges have been reduced on average 6.2% to 12.2 cents per kilowatt-hour (kWh) in FY 2018.  Over this period, total annual retail revenues have been reduced approximately $2,400,000 on about 300 million kWh of annual sales.  This projected average for FY 2019 is 12.4 cents per kWh, as increases in fuel and purchased power costs are passed on to customers in the PCA.

According to the Fiscal Year 2019 business plan, the BLP projects $37.5 million in total annual operating revenues.  The BLP is planning to use these funds as follows:  $7.4 million on fuel and fuel related expenses for local power generation; $6.5 million for net purchased power costs (including renewable energy purchases) and transmission expenses, $6.9 million for other expenses associated with the operation of its power production plants, $2.4 million for distribution system expenses, $0.5 million in energy efficiency programs, $3.3 million for customer service, accounting, administrative, and general expenses. Additionally, capital improvements for the fiscal year are projected to be $5.8 million and the utility is anticipated to make a $1.8 million transfer or payment in-lieu of taxes to the City of Grand Haven’s general fund.

Grand Haven Board of Light & Power is a one of over 2,000 Public Power utilities in the United States serving approximately 14,000 customers in the greater Grand Haven area. The Board of Light & Power’s mission is to meet our community’s expectation for quality local electric utility service that returns value to our customers and the community as a whole.

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