Iola will spend more than $540,000 on a pair of electrical infrastructure projects.
City Council members unanimously approved both projects Monday, even though only about $70,000 of the $540,000 had been previously budgeted for the work. The rest will come from the city’s electric reserve fund.
The more expensive of the two is a $397,705 project to install a new transformer at the Bassett substation serving Gates Corporation.
Councilmen were told that an existing transformer at the substation overheated during the summer and was at risk of failure. Had it failed, the Gates plant would have been without power almost immediately.
Engineers from Mid-States Energy Works, Inc. recommended that instead of installing larger transformers, the substation be modified elsewhere to handle the type of electrical load Gates demands.
Engineers recommended expanding the substation with a new 10000/12500 KVA three-phase transformer, and that wiring be changed.
The transformer itself will cost $229,850, with another $167,855 necessary for the installation and rewiring. City crews should be able to assist with the installation, which could mean savings in the $167,855 expenditure, Electrical Distribution Superintendent Kent Tomson said.
The upgrade is necessary, Tomson said, primarily because of the increased demand at Gates.
The workforce at the rubber hose manufacturer has increased from 400 to more than 700 within the past two years, “and the demand is there 24 hours a day,” Tomson said.
Without any improvements, the existing substation would be almost certain to fail next summer, Tomson said, which could idle the plant for a week or longer.
COUNCIL members also approved spending $148,148 to upgrade the computer control system on the city’s Wartsila generators.
The existing Wartsila controls were in place when the generators were installed in 1998-2000 and are now being phased out, with some parts no longer available after that. It’s uncertain how long the parts would be available.
The city had anticipated upgrading the controls, but only $70,000 had been budgeted for 2012, City Administrator Carl Slaugh said, because that was the estimate given to the city early in 2011.
“If we postpone this, and the generators fail next summer when we’re trying to peak shave, this could cost us a lot more than another $70,000,” Council member Don Becker said.
IN A RELATED matter, council members delayed for now a decision on whether to leave the Kansas Power Pool.
Iola is required to give a two-year notice if it plans to leave the consortium, through which the city purchases most of the electricity it then sells to residents and businesses.
All signs had pointed to Iola leaving the pool because KPP could no longer give the city financial considerations for Iola’s ability to generate electricity in times of high demand. A request by the city to do just that was rejected in October by KPP’s board of directors.
However, an 11th-hour effort by KPP to come to an agreement with Iola and other cities that have generating capacity may be forthcoming this week, Slaugh said.
Council members Ken Rowe and Kendall Callahan both urged the council to submit its two-year notice to enable the city to negotiate with other suppliers, such as Westar, Kansas’ largest utility provider.
Callahan noted that Westar could not give the city a proposal if it remained under contract with KPP.
“I find it hard to believe that Westar can’t give us a presentation,” Councilman Joel Wicoff replied. “Give me some data. It would be foolish for me to cancel a power company if I know nothing about what else is out there.”
Becker also noted that KPP was set to give a new proposal to Iola.
“I don’t see where two weeks would make or break this,” Becker said.
At $1,000 a day — an estimate Callahan said could be the difference between what Iola pays KPP and other suppliers — two weeks is still expensive. Plus, he said, Iola could still negotiate with the power pool after it gives a two-year notice.
A proposal to withdraw from KPP failed 5-3, with Rowe, Callahan and Beverly Franklin in support. Wicoff, Becker, Steve French, Steve Stewart and Jim Kilby were opposed.
