City to participate in new AMP hydroelectric project
by JOHN LASKO
News-Times reporter
By a 7-0 vote on Monday, Jan. 22, council members gave mayor David Taylor the green light to participate in American Municipal Power (AMP) Meldahl/Greenup Hydroelectric project.
While the city of Amherst is not investing any money in the construction of this plant, they will be paying for 1.5 megawatts of electricity once it is up and running.
"Twenty-five percent of our need is in hydro and we think that certainly would go a long way to meeting any federally mandated standards in the future," utility rate consultant John Courtney said.
AMP, York, Pa.-based Voith Siemen Hydro and the city of Hamilton will be building the Meldahl Hydroelectric Plant from the ground up. The facility -- located at the Captain Meldahl locks and dams on the Ohio River -- is expected to cost nearly $122.9 million and have a capacity of 105 MW of electricity. It is the largest of the six hydroelectric projects AMP currently has under development.
"AMP will actually end up owning 100 percent of it, but Hamilton will take 51.4 percent of the output," Courtney said.
The Greenup Hydroelectric Plant has been in existence since 1982. The facility, located at the Greenup locks and dams on the Ohio River, has a capacity of 70 MW of electricity .
Hamilton will own 51.4 percent of the plant, while AMP will own the remaining 48.6 percent of it.
"So they kind of merged two different sites into one project," Courtney said.
Courtney has some concerns regarding the Meldahl/Greenup Hydroelectric Project. He does not like the fact the city of Hamilton will have such a dominate presence , which is evidenced by the 106 percent step-up provision in the Meldahl power sales contract.
There are also added risks like construction costs coming in higher than originally anticipated. For instance, AMP decided to pull the plug on a new coal fired plant in Meigs County on Wednesday, Nov. 25, 2009, after contractor estimates went up more than $800,000,000 from previously estimates.
"Once you commit to this or any project, you're on the hook and that's called take or pay contracts," Courtney said. "This means Amherst is committed to the project regardless if it ever gets up and running. If they decide not to do the project, the city will won't receive power because there won't be a project to receive power from and so that obligation to take power goes away, but their obligation to pay for costs that have been spent does not go away. This is probably the big risk."
AMP has agreed to pay Hamilton $4,100 per kW for the 30-year-old agreement on the Greenup facility, which is only $400 per kW less than what they are currently paying to build the brand new Meldahl plant.
"This is due to the fact that the valuation of the Greenup Plant is based on the projected market value of the output of the plant over a 40-year period, as opposed to a cost-based analysis," Courtney said.
Annually, the city has a total of 115,000,000 kW hours coming into their electric system from five different sources.
The city purchases 863 kilowatts of electricity from two hydroelectric plants located at Niagara Falls and along the Saint Lawrence River. These facilities are owned and operated by the New York Power Authority (NYPA). Amherst receives 5,140,718 kWh annually from this project.
Nearly 5,000 kW of electricity comes from the Ohio Municipal Electric Generating Agency (OMEGA) Joint Venture 2 which consists of two large 30,000 kW combustion turbine generators located in Hamilton and Bowling Green. There are also smaller generators -- or what Courtney dubbed "cats in a box" -- scattered throughout the state which generate nearly 1,800 kW of electricity.
Amherst also purchases 6,000 kW of electricity from AMP's Combustion Turbine project.
About 35 miles southeast of St. Louis, Mo. is the Prairie State Energy Campus. The 1.6 million kW coal fire plant produces 4,976 kW of electricity for the city of Amherst. Annually, the city receives 43,589,760 kWh from this project.
Finally, the city is receiving 2,220 kW from three hydroelectric plants located at the locks and dams along the Ohio River in Cannelton, Smithland and Willow Island as part of AMP Hydro-Phase 1 project.
"These are what we call run of the river hydro," Courtney said. "This means we only get electric when they are able to generate it. The problem with the low head hydro is if you have too much water like a flood condition, what happens is the down stream side of the dam the water elevation is the same as the upstream side of the dam and you don't get any head and as a result, you don't get any power."
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