Pharos-Tribune

November 28, 2012

$500 million project would power city with trash

Almuina: ‘This could put Logansport on the map.’

by Amie Sites
Pharos-Tribune

LOGANSPORT — Logansport city officials are looking for a private entity to invest at least $500 million into turning the existing coal-fired power plant into a plant that burns pellets of residential refuse, saying the project would add jobs, use renewable energy and assure long-term energy independence for Logansport.

Utility Service Board members voted Tuesday night to publish a request for proposals to repower and expand Logansport Municipal Utilities power generation by converting the coal-fired generators into a refuse-derived-fuel power plant.

The plant would burn solid waste pellets and would achieve total system capacity of 300 megawatts, far more power than the 38 megawatts the plant currently generates.

Mayor Ted Franklin described the project as the best approach to maintain local independence for electricity generation and distribution, saying the conversion would allow the city to generate electricity at a cost of 4.5 to 5.5 cents per kilowatt-hour.

The proposed public-private partnership project is estimated to cost up to $590 million. The public-private financing option would have private sector firms pay all development and construction costs. LMU would operate and purchase the facilities without bonds being issued.

Presenters before the board Tuesday evening described the power plant’s future as bleak, if nothing is changed.

LMU has lost nearly $4 million in the past three years, board members noted. None of the four alternative plans laid out this summer — including repowering existing generators, repowering natural boilers and converting boilers to natural gas — would allow the utility to get back in the black without base electric rates rising at least 95 percent, according to John Skomp of Crowe Horwath LLP, which prepared an analysis of the four alternatives.

“None of those are a silver bullet to solve your problems,” Skomp said.

A study team headed by consulting firm William-Lynn-James, and including seven experts in the energy field, outlined the proposal to convert the power plant to burn trash pellets.

Bernie Paul, president of B Paul Consulting LLC, said several of the 50 companies interested in the city’s proposed renewable fuel project are well-known names in power.

“I don’t know where the money will come from, but there is a lot of interest where companies don’t seem to be scared of the cost,” Paul said. “I wouldn’t be surprised to see interesting partnerships formed.”

The LMU plant currently has 30 workers and the new plant would add an additional 30 jobs, according to Paul Hartman, LMU superintendent.

Franklin added that in the “big picture,” he expects that the project, if carried out, would add 160 jobs.

No location has been selected yet, said project manager Alvaro Almuina, director of EllSo Consulting Inc., but the site would have to span at least 100 acres and be accessible by interstate highway.

Almuina said there would be 10 pellet machines total. The pellets would come out in increments of three inches by one inch.

“Indiana doesn’t have a lot of renewable options,” Almuina said. “This could put Logansport on the map.”

Franklin said the project would also lower the city’s trash disposal costs. About $900,000 is spent every year getting rid of trash, he said.

The Logansport Municipal Utilities repower and expansion study team will host a public information session at 7 p.m. today to discuss the possible construction of a power plant fired by refuse-derived fuel.

“The meeting Wednesday evening is the first opportunity for the public to hear one-on-one about the project,” Franklin said. “We did a lot of work behind the scenes. Now we want to do work out in the public.”

If implemented, the first phase of repowering the existing plant would be completed no later than 2016. Construction of the new power plant would likely be completed in 2016-2017.

LMU will accept proposals until Jan. 11.

Amie Sites is a staff reporter for the Pharos-Tribune. She can be reached at 574-732-5150 or amie.sites@pharostribune.com.

WANT TO GO?

Who: Logansport Municipal Utilities repower and expansion study team

What: Public information session

Where: City council chambers, City Building, 601 E. Broadway

When: 7 to 9 p.m. today

Why: To review information and answer questions about the city’s proposal to form a public-private partnership to convert the coal-fired power plant to a plant run on refuse-derived fuel.