Jun 9 - McClatchy-Tribune Regional News - Christina Killion Valdez Post-Bulletin, Rochester, Minn.



The future of Austin's northeast power plant is under scrutiny as talk of selling off its approximately 30,000-ton coal stockpile moves forward.

The board of directors for the Southern Minnesota Municipal Power Agency, which owns the plant, will vote during its meeting today in Fairmont whether to sell the coal before turning ownership of the plant over to Austin Utilities Sept. 1 when the Capacity Purchase Agreement ends.

"There is a potential deal in the works," said Dave Geschwind, chief operating officer for SMMPA.

However, the board must first give the agency approval to sell the coal. Plus, under the current agreement, SMMPA owns the coal, but Austin Utilities has the right of first refusal.

 At this point, the utility is running the numbers to determine if purchasing the coal stockpile from SMMPA would be an economic benefit for Austin, said Alex Bumgardner, AU's power production director.

The coal, which is on site at the Northeast Plant, is enough to run the plant for 100 to 200 days, depending on demand, Bumgardner said.

While the Northeast Plant, which opened in 1977 north of Todd Park, is the only AU powerhouse still in operation, it is not needed to supply the city with power. The utility is under contract with SMMPA to purchase power from the agency for the Austin area until 2030. Under its power sales agreement, however, the utility can sell the power from the plant on the market. The economic benefit of selling the energy is being studied, he said.

"Over the last couple years, since the economy fell and the energy market changed, it's been quite minimal," Bumgardner said of use of the plant, noting that last year the plant only ran for a few weeks, followed by a few weeks this spring.

The plant is also capable of running on natural gas, he said.

With the right to first refusal, the utility would decide within 30 days if it wants to purchase the coal, he said.

"We are throwing the numbers all together and talking internally," Bumgardner said.

As for the potential buyer, under the terms discussed for the potential contract, the buyer would take title to the coal on the pile and be responsible for loading and transportation costs, according to the board documents.

If approved and finalized, the transaction could be effective as early as July 1.

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