Iola City Council members will have several decisions to make regarding its energy portfolio in the near future.
Council members heard from Scott Shreve, the citys energy consultant, about a proposed solar power agreement with Westar; the chance to buy used diesel generators; and the citys hydro-electric options.
The proposed solar project generated the most discussion.
On the table is an offer from Westar to construct a series of solar panels in Iola, capable of generating up to 4½ megawatts of electricity per hour.
Westar would pay for construction on the citys behalf, taking advantage of state and federal tax breaks in the process. Then, after seven years, the city would pay Westar about $3.7 million to assume ownership of the facility pennies on the dollar, Shreve said.
The issue, Councilman Aaron Franklin said, would be whether the costs to buy the panels would be made up in other savings. I want to see a cost-benefit analysis, he said.
There are several factors at play, centering on whether Iola can generate enough electricity on its own to qualify for lower rates from outside sources.
Currently, the city pays between $75,000 and $85,000 annually to cover generation capacity shorts. Iolas natural gas and diesel generators can produce a combined 22.5 megawatts per hour, less than the citys peak demand threshold of 25 megawatts.
That is important, because the Southwest Power Pool, of which Iola is a member, dictates municipalities must be able to meet their own peak demand to be considered generating cities, and eligible for less expensive wholesale energy costs.
On top of the solar option, the city also has been setting aside electric reserves over the past several years to buy a series of used generators, at a cost of about $1.5 million.
The generators alone would cover that capacity shortfall, Councilman Ron Ballard noted. So why worry about adding solar power to Iolas portfolio, particularly if it savings dont cover costs?
The answer lies in the difference between energy capacity and energy production, Shreve responded.
Ideally, the diesel generators will set idle, he said, because of the costs associated with producing electricity.
The solar panels would produce electricity on every day the sun shined, allowing the city to (a) meet its capacity needs, or (b) sell electricity back to the marketplace.
While the solar panels could generate up to 4.5 megawatts, Iola likely would be given credit only for about 2.7 megawatts from the Southwest Power Pool.
We really need both pieces, the best of both worlds, Shreve said.
