Even during periods of peak use, Utilities selling surplus electricity
Aug 4 - McClatchy-Tribune Regional News - Debbie Kelley The Gazette, Colorado Springs, Colo.
Colorado Springs Utilities found itself in a seemingly contradictory position in July: Though customers broke the record for the most electricity used in one day, on July 17, the utilities company still was able to sell excess power it generated to other cities. Utilities netted $1.4 million in July from power sales, and $2.8 million from January through July, compared with $2 million for all of 2006. How did the municipal utilities company manage that? It's a matter of taking advantage of an opportunity, officials say. Even though the summer's been hot, with temperatures hitting 90 degrees or more for nine days last month, there were enough cloudy and rainy afternoons to decrease local electric use, Feltz said. "Clouds versus no clouds can make a 30-megawatt difference in demand," she said. When demand for power drops, the utilities company sells the excess it produces from its six power plants, primarily to power companies in New Mexico, Arizona, Wyoming and Montana. Hot summer weather has increased the need for power in those markets, Feltz said. "It's opportunity-based," she said. "But we make sure we've got the supplies we need before we look at selling." In the past, the city was able to sell more significant amounts of excess power, said City Councilman Randy Purvis. "As the city has grown, the excess capacity has been consumed by our own needs, but more recently, depending on the spot market and the price for electricity, we've been able to generate for sale outside our territory," he said. "It's a good thing -- it makes a few bucks and lowers the electric cost adjustment for ratepayers in Colorado Springs, and we're always looking for ways to lower utility costs." Feltz said revenue from power sales offsets the company's annual budget for producing and buying power -- $166 million this year. So residents could see a quarterly energy cost adjustment in the form of a credit on their electric bills in the future. Charges for electricity are based on forecasted costs, which are adjusted after expenses are tallied. An electric adjustment made Wednesday lowered electric bills by $2.76 a month for the typical residential customer who uses 600 kilowatt hours per month, said Dave Grossman, Utilities spokesman. "The end result of our sales is that we're able to fully utilize our assets, which can help bring electric costs down or keep them from rising," Feltz said. Energy traders start their days at 5 a.m. at the operations center off North Nevada Avenue, with heavy trading taking place between 6 and 7 a.m., via recorded phone negotiations and fastpaced instant messaging. Electric power costs fluctuate in the volatile commodities market, from about $100 per megawatt hour during peak times, such as hot days, to the mid-$50s during normal usage, Feltz said. But during the Western energy crisis of 2000 and 2001, prices spiked to $800 a megawatt hour, producing record local annual sales that topped $20 million, she said. Local residents and businesses are expected to use 4.7 million megawatt hours this year; one megawatt hour equals 1,000 kilowatt hours. To meet that demand, Colorado Springs Utilities will generate about 3.5 million megawatt hours from its plants and purchase 1.2 million megawatt hours from other power plants, at a cost of about $116 million, Feltz said. Utilities companies sometimes need to purchase power because their generating units are down for maintenance or repairs, which Feltz said is common in the industry. Computers measure the city's electric supply and demand every four seconds -- based on how much power is being generated and how much is leaving the system -- and make adjustments or alert the traders that the supply is low and electricity needs to be bought. "The nature of electricity is instantaneous, which is why we constantly monitor and respond to the population's behavior," Feltz said.
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