LUB Approves 2012 Budget, Price Hikes Coming Next Month

Repowering Project Coal Storage Domes

Utility Board members voted to approve the 2012 Budget as presented by Superintendent Rick Rigel.  There was an update made on raw materials used by the Repowering Project, such as coal and limestone.  The Operations budget includes total revenues in excess of $15.4 million of which $14.6 is derived from retail electric sales, with gas gathering fees and wind production making up the balance.  Rigel noted the revenues are based on the rate increased taking effect November 1 of this year and the 2.5% increase coming June 1, 2012.  Total operating expenses for the 2012 budget are at $12.9 million of which power supply accounts for $10.5 million, 20% higher than the 2011 budget. 

The Lamar Light Plant needs to make additional natural gas purchases to supplement the earlier purchase of 24,000 MMBtu from Colorado Interstate Gas.  The additional gas will be used for the start up operations of the Repowering Project.  A slower than usual delivery schedule for coal supplies has resulted in the need for additional natural gas to supply the plant through the end of October.  Superintendent Rick Rigel said that fortunately, costs are lower in October which will save some money on the extra purchase.  The Lamar Utility Board voted to award the contract to Concord Energy which had the lower of two bids received.  The light plant is purchasing 28,000 MMBtu’s at $.035 per MMBtu. 

Wind production from the three turbines owned by Lamar Light and Power is steady with power production to date at 9,454 Megawatt hours.  These figures, however, are a 10% drop below 2010 amounts, year-to-date.    The turbines are averaging 32.42%, down from last year by about 9%.  One factor is down time for the T-1 turbine in September, and literally less wind compared to this time last year.    The ARPA turbine in Springfield continues to lead the group with an average capacity factor of 43.65% for a generation of 4,286 Megawatt hours so far this year.  The Lamar T-3 generator has had some mechanical problems and the Utility Board approved making the repairs with IPS Trico Company.  The Light Plant has had previous business dealings with this company. 

Rigel said some power generating problems developed last Thursday when steam temperature spiked due to problems with the system controls and both turbines tripped, going off-line.  Unit 6 was back in production a few hours after the fault and Unit 8 is still being brought back online.  He expects more testing and tuning to continue through October, at which point the power units should be fully operational.  Rigel also mentioned that because of potential lower natural gas prices, the plant may be able to reduce power production costs by purchasing power offline.

By Russ Baldwin