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Lethbridge Herald Newspaper Archives

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Lethbridge Herald {Newspaper} - 1974-01-15,Lethbridge, Alberta EMßtrlet The LetHbvidse Herald Loca/ new» SECOND SBCnoK L«thbrldge, Alb«rtt. Tu**(J#y. January 15, 1974 Pag« 11 to 20POWF.R PLANT Public invited to read report then give its opinions Feb. 18 hS".»SSSWS21SS%; to tte MNWini «lilcb win be btld In the YatM CeSirtra .vtltabl*. Itawld »«r Etellevue. With., consulting fim ttot did tta study wlU b« uk«d to ittwd the mMting ta pment the report ind tnswer queitions. By \>ii>Y orii.r: llorald SlHfr Wriior In making the resoluOon to Uito tte report for the public meeting. Aid. BiU Kergan termed ue power plant issue one of the most important thcttions fadng this councU or any council in the history ofLetobrldge. “CouncU must show tome leadership In this _ we shouldn’t wait for the clti^ to raact," he said in asking for the beai^. Other aktermen agreed with «d. Kerran on the necessity for a public meeting but added some qualifying commente, ^ . D^ty Mayor vaughan Hembroff, vho chairs councirs power plant committee, rsted people must read the report and. it with some understanding if they are to present an intelligent brief to the ■ting. "I could sit down and write an entire brief on why we should or why we shouldn’t have a power houK without ev«i looking at the report,” he said. '^ut Just to sit back and say l^ewing the plant is a good thing or it isn’t, is useless,” he said. People have also got to be conversant with the present contract with Calgaiy.Powr which can’t be broken nntll W*1 (unless Oie city agrees to sell the plant to the company), be said. “It’s important that people understand all the issues.” Aid. Vera Ferguson was concerned about, what she caUed a tendenw « the part some people to think council was reluctant to discuss the issue in public. "TWs is not true at all,”j^ said, tait wanted to know if council would In fact be dis- cussing the report at its regular pubUc meetings before the h®^«- . _ She was told council wUl diacuäs the issue in public before the hearing. Mayor Andy Anderson said council will have to study the report further, gemng mow deuils from city achünistrators oefore mat* ing any final declsi<m on the fate of the power ***Ald. Cana Barnes concurred with the mayor’s statement that further study by aldermen is needed. “Ut’s admit it - I'm sÜll in the dark,“ he said. “I still have several quesüons so 1 can put all the figures right in my own nund.” Besides the CH2M - HUl report, an additional letter from the consultanU was made public Monday. Both the report and fetter are available to be read at the city cleA s office in city hall. The letter was a remonse to ^uestioas a{^ pareatly made by aldermen at a closw meeting last week when the consultants presented their report.    ^ , It deUlls the costs of two of the plans presented in the report, setting out the annual additional cost to the average home consumer if either of these plans were adopted Instead of purchasing all power, which the consultants say is the cheapest route. The first option is that of building a coal-fir«d steam generating plant that would enable the city to again become selfsufficient in electrical power supply. The consuiUnts say this would cost the average home ctmsumer anywhere from fl9.ll more in IWl to as high as |81.70 more in 1988, than what his power bills would be if the city purchases all its power from Calgary Power after 1977. The additional cost to the av^ge home consumer in 1977 would be 932^; ^ IBTO, $28.09; in 1979, 124.92; in 1980, *21«; J»!; 1982,146.31; 1983, 191», 127; 1986, 151.70; »87, $44.08. 1988, IM.84. The higher costs in 1977,1982 and 1988 occur units are added — one 60 in each year.    . ^ r option examined on a yearly cost to consumer basis above nurchasing total re- as generating units i m«awatt unit in each Ihe other option exai qulrements is that of adding a gas-fired turbine in 1977 and a smaller used steam turbine in 1985. This plan would cost the average cjmsumer more than the cost of obtaining all power from Calgary Power by «nio^U rantfw from $1.75 in 1977 to as high as Ml ®7 in 1980 and back down to 82 cents in 198B. The consultants’ letter also pointed out ^t the «at projectifflis in their study for ptant expansions were lused on a 30-year amortiza-tionperiod for the debenture loans required. However, City Manager Alllster Findlay says the city would have to go on the open market for funds and it’s doubtful it could obtain a loan for more than 20 years. This would, the consultants say, further Increase the cost to Lethbridge if it generates most or all of its bulk power supply Instead of pairchasing it When is buying power cheaper than generating? The stage for the difficult decision that must be made on the fate of the city’s power plant was set by past decisions. In 1969. after a two-year debate and considerable negotiations, the present 12-year contract with Calgary Power Ltd. was signed, in effect putting off the decision tiiat must be made now. That agreement provided for the supply of certain minimum amounts of electricity to the city by Calgary Power, wtTiCh by that time was already supplying peak load requirements to the city. Until 1967 the city’s 33.5 megawatt capacity plant was able to supply all the city’s requirements. As demand grew, the power purchases increased each year.    ^ Under the 1969 agreement, the city was to purch£ise a minimuni of five megawatts to Dec., 1974,10 megawatts to Dec. 1976,15 mw to Dec. 1978,20 mw to Dec. 1980 and 25 mw to 1981 at the end of the contract. But energy demand grew between 1969 and 1973 at double the anticipated rate, and in 1972 the city was purchasing an average of 20.65 megawatts — about 44 per cent of total requirements. Under the 1969 contract, Calgary Power is supplying power to the city at a higher price rate than it would if it were supplying cording to the CH2M—Hill report. When the contract was signed in 1969, it was thought that the city would still be saving money by producing some of its own power by the time the contract could be terminated in 1981. But the city did one important concessicHi in the negotiations leading up to the 1969 agreement, by retaining distribution rights throughout its boundaries and m West Lethbridge which was annexed in 1970. The city makes a profit on distribution of electricity over and above administrative and operating costs and the cost of the power supply, whether it is purchased or whether the city produces it itself. The city’s river valley plant has been in operation since 1910. A private firm called Lethbridge-Electric Co. provided the city’s first electricity beginning in 1893 The city bought the plant from l^thbridge Electric m 1908 and began construc- tion of a new plant, the one now used. The new plant had one 300-kitowatt and one 500-kilowatt generator driven by steam engines In 1932 a 3.5-megawatt steam turbines operated with gas-fired boilers, and two 10-megawatt gas turbines were added later and form the working parts of the existing plant. It has a maximum capacity of 33.5-megawatts but this output can be obtained only on cold wmter days as the output of the gas turbines falls rapidly with increasing outside temperatures. The employees If'Calgary Power takes over the city would need only a dozen There is a human element that council will have to take into consideration in its power plant deliberations — the fate of the plant employees. Some 27 employees work there now, and about 10 to 12 of them would be retained by the city for Its water treatment plant opcrfltlon»    « It Calgary Power has promised to offer the _ der jobs, keeping the river valley plmt operable for at least two years if necessary to accommodate staff. After that, says the company, the plant could be partially scrapped or put on standby. However, there are at least two problems that would have to be Ironed out concerning the city employees Calgary the city’s entire l— If the city sells the plant to Calgary Power, the 1969 contract will be mutually dissolved and Calgary Power would suppb au the city's power needs at a lower wholesale rate. At a certain point then, the city’s power plant stops making, or rather saving, the city money because the power it is generating plus the cost of the power purchased from Calgary Power IS higher than would be the cost of purchasing the entire amount from Calgary Power at the lower rate. Prior to the 15 per cent mcrease granted Calgary Power by the Public Utilities Board, this point was close to being reached in late 1972. With the 15 per cent jump and the further five per cent hike Calgary Power has applied for, the plant will still save the city money until 1977, ac- Power would inherit with the plant. One is the transfer of the city’s pension plan.    . The other is that some of the men are m one union — the International Union of Operating Engineers — while the Calgary Power operators are in another — the International Brotherhood of Electrical Workers.    , ^ . Tills raises the possibility of having employees for the same company doing the same job under different contracts with different benefits. According to one source, this would be undesirable from a management point of view because the membership of each union may want the added benefits of the other’s contract $600,000 offer near plantas worth estimate Calgary Power Ltd. has offered the ci^ $600.000 for its river valley power plant - Jock, stock and barrel. And according to some sources, this offer, which is close to a 1972 city administration estimate od the plant’s worth, will likely stand for perhaps only another six months. The offer was made by Calgary Power Ltd. last spring following an evaluation of the plant by an associate company, Montreal Engineering. The evaliiation showed that the power plant is now worth more to Calgary Power than it is to the city, because under the current contract with Calgary Power, the city has to operate the plant inefficiently on a start-up, shut-down, start-up basis, supplementing the base load supply from Calgary Power. The CH2M-HilL report does not include an Valuation of the plant’s worth or of the Calgary Power offer, because that was not in the terms of reference of its study. But the consultants do say that with good maintenance and some repairs over the years, the plant’s two gas-fired turbines and all but the smallest of the three steam turbines could last another 20 years. to establish a third ary Power has also a^------------ point of supply to the city. This would be established on the west side and its installation could save the city a considerable amount of money over the years. Without the West Lethbridge tie-in, the city would have to string a number of power lines across the Oldman River as West Lethbridge grew. Light bill hike inevitable WALTER KCRBEft photo Pouring forth . powar plant in Oldnrtan Riv*r valley Whatever city council decides to do about the city’s future power supply, the individual consumer's power bill is going to go up, probably by 1976, Even if council decides to adopt what the CH2M — Hill report says Is the cheapest alternative, that of buying all power from Calgary Power by 1977. an electric utility rate increase will be required about 1976, the consultants ’^^'^Thl^lmrease will be required, says the reiwrt, if surplus electrical system revenues are to be mamtainefl at present levels.    ^ .i. u • If there were no rate schedule change, the city s electrical system would be operating at a loss by 1980, the ‘^£t*a*deulled rate study will be needed to establish the timing, magnitude and form of any rale change, it says. According to figures in the CH2M ~ Hill report, the city will make about $831,000 from it’s electrical system this year It will pay Calgary Power Ltd some $1,354,500 for power the company supplies, and will spend about $595,000 generating its own power at the river valley plant The distribution system will cost about $1,192,000 and administration $157,000 bringing total expenses to nearly ^»,300,000 * Revenues from city power consumers of about $4,130,000 are expected City Manager Alllster Findlay says the electrical system profits are used for tax relief — about five mills worth this year — and to finance a certain amount of electrical system expansion. Hjliyiji|)ji(iinPiiiïïnrfi[TnîT-rïï ;