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Downtown power plant will close

By Tim Ruzek

Post-Bulletin, Austin MN

Austin’s downtown power plant appears headed to retirement following a vote Wednesday by its operating agency’s board of directors to withdraw from its contract by year-end 2009.

The Southern Minnesota Municipal Power Agency’s board voted 5-2 to give the agency the ability to end its contract with the city of Austin for the use of the Austin Utilities power plant along Fourth Avenue Northeast, said Dave Geschwind, chief operating office for SMMPA. It also made a similar decision for a steam plant in Fairmont, Minn.

Austin’s Northeast Plant — the city’s main powerhouse — and a generating station in Owatonna are in similar situations but weren’t up for the board’s consideration Wednesday in Waseca, Minn.

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The downtown facility is Austin’s original power plant, in service for nearly eight decades.

Although Austin Utilities owns the plant and supplies the staff to run it, the longtime contract gives SMMPA control of its operation.

Austin’s downtown generating station — along with other steam plants in SMMPA’s system — has become obsolete financially for SMMPA. It requires a comparatively long period of time to start generating electricity, and the powerhouse must be run a minimum of several days to avoid damage to equipment.

The downtown plant doesn’t run more than a few weeks a year, officials say.

The next step will be to formally offer officials for both plants the option to renegotiate contracts at different, more economical price structures, Geschwind said. If they decide it’s too costly to absorb extra costs to keep the plants running, SMMPA would give notices for the plants to be retired by the end of 2009, he said.

To keep the plants going, Austin and Fairmont will need to pay more or find cost-cutting options, he said.

SMMPA started a comprehensive study in 2006 to look at the cost of maintaining its plants and it found options to lower costs other than keeping the two plants, Geschwind said.

Austin Utilities general manager Jerry McCarthy said Thursday that Austin and Rochester utilities voted against the move Wednesday because there’s no plan to replace the power capacity that will be lost by retiring the plants. The decision wasn’t unexpected, he said, noting the downtown plant is old and isn’t operated much.

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"We’ve already started looking at, the last several years ... changing things around over there so we don’t have the staffing issues that we might have faced three or four years ago," McCarthy said.

Austin Utilities plans to do a routine inspection on one of the plant’s steam turbines, which, if no problems are found, could be run this year, McCarthy said. If there are problems, he said, SMMPA could give termination notice to retire the plant by summer 2009.

It could take a year or more to decide what to do with the plant, with options ranging from tearing it down to rebuilding the plant so it’s operable and can be used in another way, McCarthy said.

If the decision is to demolish the plant, he said, it would take a few years to tear it down due to the level of asbestos inside. He added that utilities likely could keep using the site because it has a viable gas turbine and substation.

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