It's
not clear how much it would cost utility customers. But Katz thinks the
potential savings from the coal plant aren't worth the investment, an
analysis city staff members dispute.
Commissioners are set to adopt a 20-year power plan for the city at
their Sept. 13 meeting. Their decision includes whether to participate
in the coal plant, an alternative Tallahassee voters allowed the city to
consider in a referendum last fall.
"It becomes an irrevocable financial commitment," said Katz, the lone
commission to call for a no vote in the referendum. "That is, you're
borrowing the money. You're stuck."
But city staff members say Katz's estimate is unfair because it
includes the cost of financing the plant over 30 years. In today's
dollars, the price tag is about $360 million.
If you said you paid $40,000 for a car, "everybody would think you're
driving a Lexus," said Kevin Wailes, the general manager of the city's
electric utility. "But what you're really driving is an Impala."
Wailes said the city might have to raise utility rates to pay for the
plant, if commissioners were to choose traditional financing, which
could start becoming due in 2009, three years before the proposed plant
would go online. But other financing alternatives would delay payment
until customers started seeing the benefits in lower electricity bills,
he said.
The power plan that includes the coal plant would cost about $4.815
billion between 2006 and 2035, in today's dollars (that's without taking
into account interest rate payments.) That includes everything from
construction to operational to fuel costs. The next cheapest option is
estimated at $4.87 billion, a $55 million savings.
Katz called the savings from what could be the city's largest ever
investment "statistically insignificant."
Gary Brinkworth, the manager of strategic planning for the utility,
agreed that savings wouldn't be the deciding factor.
"This plan is less about dollars," he said, "and more about
diversity."
The coal plant plan presented Wednesday was coupled with a $141
million energy savings component and a 30-megawatt biomass plant that
commissioners asked staff to move forward with. Under that option,
natural gas, whose recent price hikes have been blamed for high
electricity bills, would account for slightly less than half of the
city's energy production. Under the second cheapest option, natural gas
would account for almost 80 percent of energy production.
Katz said there were other options the city could consider, including
the possibility of buying 150-megawatts from an LS Power coal plant in
southwest Georgia. Over the next few weeks, city utility staff members
will be fine-tuning their analysis.
July 5th: Staff update on the power plans.
July 12th: Presentation of power-plan rankings by city staff.
Mid-July to mid-August: Public involvement period, including
proposed program to be aired on WCOT, two open houses and a possible
online survey.
Aug. 30: Opportunity for public input during a public hearing
at the regular commission meeting.
Sept. 13: City commissioners expected to vote on a 20-year
power plan for the city, including whether to participate in the coal
plant.