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HomeMy Public PortalAbout02-22-2000 PROCEEDINGS OF THE COMMON COUNCIL OF THE CITY OF RICHMOND,INDIANA,SERVING AS A BOARD IN CHARGE OF THE OPERATION OF THE RICHMOND POWER&LIGHT PLANT TUESDAY,FEBRUARY 22,2000 The Common Council of the City of Richmond,Indiana,serving as a Board in charge of the operations of the RichmondPower&Light Plant met in regular session at 7 p.m.,Tuesday,February 22,2000 in the Council Chambers in the Municipal Building in said City.Chairperson Bing Welch presided with the following Councilmembers in attendance:Howard"Jack"Elstro,Etta J.Lundy,Bruce Wissel,Karl Sharp,Larry Parker,Paul Combs,Phil Dickman and Sarah"Sally"Hutton.The following business was conducted: ROLL CALL Nine present. APPROVAL OF MINUTES The minutes of the February 7,2000 meeting were approved on a motion by Councilmember Wissel,second by Councilmember Sharp and the motion was carried on a unanimous voice vote. APPROVAL OF BILLS,INVESTMENTS AND TRANSFERS Upon recommendation of the Finance Committee,Councilmember Hutton moved to approve the following bills for payment,seconded by Councilmember Lundy and by unanimous voice vote the motion was carried. Bills Already Paid: Payroll and Deductions $236,858.53 Investments Purchased From: Cash Operating Fund Bond Sinking Fund Utility Bond Reserve Fund Depreciation Reserve Fund Insurance Reserve Fund Consumer Deposit Fund Cash Reserve Fund Group Insurance Fund Total Investments Transfer from Cash Operating Fund to: Cash Reserve Fund for Payment To City in lieu of taxes Transfer from Cash Operating Fund to: Depreciation Reserve Fund For Property&Plant Transfers from Depreciation Reserve to: Cash Operating Fund • Transfers from Consumer Deposit to: Cash Operating Fund Transfers from Utility Bond Reserve Fund to: Bond Sinking Fund Transfers from Cash Operating to: Interest and Bond Principal Bond Sinking Fund Cash Reserve Fund Utility Bond Sinking Fund Depreciation Reserve Fund Insurance Reserve Fund Consumer Deposit Fund Interest and Bond Principal End of Month Petty Cash Revenue Bonds Interest Coupons Redeemed Interest Coupons Redeemed Bond Coupons Miscellaneous Prepaid Invoices $ 62,950.86 Total Prepaid Invoices 299,809.39 Total EFT/Direct Deposit of Payroll: (72,578.28) Total Prepaid Invoices: 227,231.11 Total EFT Transfers: 123,500.00 Total Prepaids plus EFT Transfers: 350,731.11 Total Bills Not Paid: 279,711.51 Grand Total of Bills to be approved: $630,442.62 RP&L Minutes Cont'd February 22,2000 Page 2 REMARKS BY CHAIRPERSON Chairperson Welch reminded Councilmembers to mark their calendars for a 7:30 p.m.meeting Monday,February 29, at the RP&L service building. UNFINISHED BUSINESS There was none. STREET LIGHT COMMITTEE REPORT Councilmember Elstro had no report. REPORT BY GENERAL MANAGER General Manager David Osbum requested authorization from the Board to receive bids for a 2000 Digger Derrick to replace Unit No.44 which is a 1987 model with 58,113 miles.He said the age would tell them more about the unit than the miles because these trucks see a lot more hours of sitting still at one location than traveling.Councilmember Parker moved to authorize Osburn to receive bids for a new 2000 Digger Derrick truck,second by Councilmember Sharp and the motion was carried on a unanimous voice vote. Osburn gave an update on the Unit No.2 repairs,saying that the repaired rotor has been installed and it is hoped to have the unit back on line this next week.He added that if things go well and,according to schedule,the unit may be fired up by Thursday and back on line.Chairperson Welch asked if all the maintenance and upgrading had been completed while the unit has been down for the past two months.Osburn said that had been done,so there would not be a spring outage,but there would be one in the fall.He explained that all major repairs had been done while the unit was down,which would prolong the time for another down time for the next major repair another five years,which would save some money. Chairperson Welch asked Osbum about the two new sets of low Nox burners brought in last fall by A.B.B.for a test burn.Osburn said that test for two new designs of the low Nox burners did not lower the Nox output significantly so they had to revise their designs.The good news,however,according to Osburn,is that they did give RP&L the burners and even though they didn't lower the Nox as A.B.B.had hoped,they are still good burners so the utility received the new burners at no cost on the deal. Councilmember Dickman asked if Osburn had heard anything from EPRI about Unit No.2 and Osbum said they have given RP&L a list of tests they would like to have run on the turbine blades.He said the utility is also working with the insurance company on this also.He said there is nothing to report on that just yet. Osbum gave a brief update on where RP&L is on its SO 2 performance,explaining that this year is when they have to meet a tighter SO 2 emission limits and he said he feels they are off to a good start on that.He reminded the Board that a year ago they commissioned a study on the interaction between lower sulfur coal and how it would react with their precipitators and cause more particulate emissions.He said they did that model study and made some modifications to the No. 1 precipitator.He said it looks like a lot of those things have paid off,adding that the utility is now burning roughly 3.5 pound per million BTU as far as the sulfur content and opacity is running very well,probably better than it ever has.He said they used to burn,typically,5 to 6 pound sulfur coal.He said in the past,sometimes when they got past the 5 pound down to the 4 pound,they would start having opacity problems,but that doesn't seem to be happening now.He said it is good news that they have been able to burn a lower sulfur coal,but they are still testing as to how much lower they can go in that area. He said the other side of that is that this Board did approve that they could go out and buy SO2 allowances as an insurance policy to offset that and he said he had done some of that.He said that initially they had targeted buying 2,000 credits/allowances and he watched the allowance market and it started an upward climb so he bought 1,000 at $191.He said at that price,he didn't want to go out and buy all of the 2,000.He said he watched the market and when it dropped down,he bought another 1,000 at$123.Therefore,he said,they have 2,000 credits/allowances at an average price of around$150. Osbum said they also intend to do additional work this fall to the LIFAC unit or dry scrubber and have it operational by September so it can be operated if it is necessary and remove more SO 2.Osburn said,in response to a question about the cost of operating that unit by Councilmember Wissel,that it is about$100 a ton to remove.The big catch,he said, is the reliability of the unit is suspect.He said the hope is to run the unit in the fall and get a better handle on those costs and the reliability.He said it had only been run in the past on an experimental basis,explaining that since it cost money to run and the limits didn't require it,it didn't make sense to run it. Chairperson Welch said he had noticed in the annual report that the utility had averaged out on its coal costs somewhere in the$32 to$34 per year range for the last year.He asked what the utility is paying for low sulfur coal at 31/2 pounds per ton.Osbum said that price that Chairperson Welch is seeing also includes some internal costs such as their coal handling personnel and equipment,so they are actually buying the coal delivered anywhere from$29 per ton to$31.He said the utility has taken bids for the next six months and they are seeing it around$32 to$33 per ton so it did go up,but not near as much as they thought it would. Osburn said he had distributed copies of the employees'handbooks to Board members and reactions had been pretty positive so far.He said he attended the IMPA meeting recently and they had done a power supply study and foresee the need for more generation that they may own themselves and they also see the need to acquire more power for their members.He said they projected it out to 2007.He said this summer IMPA would issue an RFP for somebody to supply them a certain amount of power,about 85 megawatts.At this point,he said,they really don't care where that power comes from,whether it is the power market,cells,another utility or RP&L. RP&L Board Minutes Cont'd February 22,2000 Page 3 He said he thinks it is something that RP&L ought to take a look at,as to whether or not it makes sense to address generation needs here in Richmond and to also meet the needs of IMPA through that RFP.And,he said,if RP&L does that,they need to take action this summer.He said that is something to think about and talk about,as to whether it makes sense for the utility to have any more generation.He said he feels that they might look at it because,from a reliability point,this system demand last year had crossed over and it no longer has enough generation to meet the system demand. Osbum said it's a whole new ball game now when the utility is generation deficient and it never used to have that problem.He said the Board might want to look at it from a reliability or economic development standpoint of having generation located here instead of someplace else.Also,he said,with all the environmental issues that have to be dealt with,they seed to look at whether or not it makes sense for the utility to try to address future environmental issues along with added generation. Chairperson Welch asked what the utility averages out on an annual basis.Osburn said he guessed it is probably in the 140-megawatt range.In answer to Chairperson Welch's question about a feasibility study in the future if the Board starts discussing these issues,Osburn said that is what would be needed,estimating that it would take about three or four weeks to do. Osburn said RP&L's grant from APPA was to study a micro turbine,which is a very efficient turbine that runs off gas.He said they are still finalizing the initial designs of that and will probably come to this Board soon to order a turbine,so that is proceeding.He said that is a case where APPA is willing to put up$47,000 toward the project,which is anticipated to be about half of the total cost. Councilmember Hutton asked whether or not New Castle was thinking of building a generation or peaking plant? Osburn said it is a joint project between CINergy and Duke Energy to build around a 600-megawatt combustion turbine plant over in Henry County.He said he thinks that is moving forward as well as one in southern Indiana around Columbus,adding that there has been a lot of action in this in the past six months.Last summer,he said,there were a couple of days that there wasn't enough generation in the Midwest to handle the load and industrial customers were asked to cut back on their power.He explained that part of this is to address that need because they don't want that to happen again in the summers in the future. Osburn announced that he has been having ongoing discussions with Whitewater Valley REMC,trying to formulate a non-contractual partnership,adding that it is not in the legal terms they might think of.He said RP&L thought it made sense to find ways to work together in a cooperative way in this area and to try not to have too much duplication of effort,hoping it might save the customers of both companies money.He said they actually share pole lines already,as well as facilities,and in some respects REMC is a public power company also. He said they would start off slow,doing some joint purchasing where they could possibly pool their resources to buy a larger amount of material together.He said RP&L is also looking at doing some metering services for REMC,which they contract out now.He said this is unique in Indiana because,typically,REMCs and municipals have been butting heads and fighting a lot,adding that he thinks that is unfortunate and a waste of time.He said they are going to try this to see if it works,hoping it would be beneficial for both.In answer to a question by Councilmember Sharp,Osburn said it would not require additional personnel to perform this metering service for REMC. NEW BUSINESS There was none. ADJOURNMENT There being no further business,on a motion duly made,seconded and passed,the meeting was adjourned. Bing Welch,Chairperson ATTEST: Norma Schroeder,Clerk