Apr. 13--At least five power companies are considering buying electricity from Bay County, which affords the county another opportunity to make its electricity-generating incinerator more profitable. Progress Energy currently purchases electricity from the county, but its contract expires in November. "We want to find the company that would pay us the most per kilowatt for our electricity," said county Utilities Director Richard Hunt. Gulf Power Co. and Alabama Electric Cooperative Inc. are two of the potential buyers, he said. After November, the county will sell its power without having to use another company's transmission lines and technicians, or "wheeling," charges.

Right now, Bay County pays Gulf Power to transfer power to Progress Energy. Eliminating the middleman in electricity sales to large electric companies is one of the mandates established through legislation passed last year. The county also loses 7 percent of all electricity sales for the expense Gulf Power incurs from having to transfer it to Progress Energy in South Florida. This "line loss" would not exist without a third party involved, said county attorney W.C. Henry. Another source of revenue derived through the county's contract with Progress involves a "capacity payment," which is money Progress saves by purchasing additional electricity from a supplier instead of having to build a generating facility.

Currently, there are no companies offering such payments -- which comprise 60 percent of the county's incinerator revenue -- until 2009, Hunt said. While trying to boost income from electricity sales, the county also has been negotiating a new contract since last summer with the operator of the waste-toenergy plant, Montenay Bay LLC, to lower costs of maintaining and running it. For the 2005-06 fiscal year, the county is paying Montenay $8.1 million to operate the incinerator, which is more than the county is taking in as revenue. "My goal is to at least break even," Hunt said. A new contract is expected to achieve that because it will remove some of the county's costly obligations to Montenay, such as reimbursements for equipment upgrades or costs associated with the carbon injection system.

"It was a lucrative contract for the contractor and not for Bay County," Hunt said. " We're creating something that's more balanced." The county's next meetings with Montenay management are scheduled for May 10-11. At that time, Hunt said, Montenay will state what it needs to charge per ton of waste processed to operate the plant. That alone will be used to determine what the county pays to run the incinerator. The waste-to-energy plant generates 73,000 megawatts of electricity yearly, which is enough to heat and cool about 4,000 homes, according to Hunt. One of the additional objectives with the new contract is to increase the yearly total to 77,000 megawatts.

Hunt said 4,000 megawatts could result in a "substantial increase in income" depending on how much a buyer is willing to pay per kilowatt. County commissioners have talked in the past year about the need to avoid entering into contracts that are decades long. The agreement with Montenay ends in 2009, and the county is discussing only a five-year extension, said Montenay Facility Manager Jerry Gross. He described the negotiations with the county as cordial and productive thus far. "We're going at this with the idea of saving the county money," he said. Though he declined to elaborate on proposals Montenay is considering to limit the county's expense with the plant.

The company is mulling over whether it wants to increase capacity and how that will affect the agreement with the county, Gross said.