August 2, 2012

LMU board has big decision ahead

— Members of the Utility Service Board are pondering the investment of more than $100 million in the local generating plant.

The first step, though, would cost closer to $11 million.

The expenditures were included in a recommendation presented last week by Lutz, Daily & Brain, the Kansas consulting firm hired in October to make recommendations for the utility’s future. Logansport Municipal Utilities needs to find a new source of energy because its antiquated coal-fired power plant is becoming less and less practical to operate.

After looking at a number of proposals submitted last year, the consultant recommended converting the existing coal-fired burners to natural gas. At a later date, the utility would add two General Electric LM 6000 combustion turbine generators and two heat-recovery steam generators to repower existing steam turbine generators.

The current-day cost of the total project would be $101.8 million.

LMU currently has three electric generating units — two coal-fired steam electric generating units that are 50 and 58 years old, and a combustion turbine generator that is 43 years old.

One of the reasons LMU is looking at converting the plant is a rise in the cost of coal at a time when the utility is getting pressure from local industry to lower its electric rates.

LMU’s superintendent, Paul Hartman, has promised to present more detailed figures this month on what the first portion of the project would mean for the utility and for customer rates.

The decisions the Utility Service Board will soon be making will have a huge impact on the long-term future of the municipally owned utility. They will put the utility on a path that might determine its future for decades to come.

At stake are not just the jobs of the 31 workers at the power plant but the jobs of workers at numerous local factories that have seen their bottom lines dented by the comparatively high price of electricity in Logansport.

The board has heard from some of those employers, and it knows that it must find a way to make the plant more economical.

There’s a lot riding on this decision. Those who have an interest in how it comes out might do well to attend this month’s meeting.