When Iolans flip a switch to turn on lights, it’s the result of a number of dominoes having fallen in a favorable pattern. IN FEBRUARY, the last month for which complete numbers are available, Iola purchased 9,997,510 kilowatts of electricity, and paid $504,535.44. That cost is recovered through rates charged consumers, with a modest profit built in to pay distribution costs and create reserves. HAVING GENERATION not only saves Iolans in the long haul, it also means that if power fails from an outside source, city crews can generate enough to meet needs over a few hours or even days.
That sounds simple enough, but the nuts and bolts of how Iola purchases power, from whom and the nuances of the process are more complicated.
An important feature is that Iola is a generating city, meaning it can produce power to meet local needs. With that comes advantage but also regulation, which is why City Administrator Carl Slaugh recommended to city council members Monday night that Iola work toward the purchase of a 10 megawatt natural gas generator, similar to the two 5 megawatt Wartsila generators on hand.
The cost is about $1 million per megawatt. The city has squirreled away money in electric reserves with the purchase of additional generation of mind, and will have $2 million in the fund by year’s end.
But, in some measure discussing more generation is putting the proverbial cart well ahead of the horse.
Iola has had generation capacity for decades, first with a steam unit at the power plant, then diesel-fired units and finally two five-megawatt machines powered by natural gas.
At one time Iola had capacity to generate about 35 megawatts, which led to favorable contracts with Westar and later in pooled purchases.
The flood of 2007 disabled the steam plant, with its repair not economically feasible. A year ago three diesel generators, capable of producing about 6.3 megawatts were sold, in deference to spending $500,000 to install catalytic converters to control emissions and by them “not being very efficient,” said Mike Phillips, Electric Department supervisor. That left the city with capacity of 22.5 megawatts, 10 from the natural gas units and 12.5 from five diesel units.
The two five-megawatt engines have catalytic converters and the emission-control devices will be installed on the five diesels within the next year.
Meanwhile, Iola as a generating city is required to have capacity 13 percent in excess of its previous year’s peak usage. With last year’s peak hitting 25.326 megawatts sometime in July, that put the requirement at about 28.7 megawatts, or better than six units more than Iola’s rating.
In 2013 Iola and Chanute, along with Sabetha, Fredonia, Arcadia and Centralia, went together to form Southwind Energy Group, through which they jointly purchase power at rates less than Iola was paying previously through the Kansas Power Pool.
In order to have capacity to meet regulations, Iola purchases capacity from Chanute, which has more than it needs. Others in the pool have similar arrangements.
“Really, it’s just a paper trail,” Phillips pointed out, in that Iola never would acquire power directly from Chanute, but uses its purchased capacity to meet Southwest Power Pool regulations for being well above whatever its peak demand might be.
Iola pays $2 per megawatt per day to meet capacity requirements, or $13,200 a month and about $158,000 a year.
When the city accumulates enough money to purchase additional generation, it will save that money, which mathematically isn’t reason enough.
But, there’s more.
With another 10 megawatts of generation — or a total of 32.5— Iola would have far in excess of what its peak might be. And, if Westar lines carrying power to the city were to go down for an extended period, Iola could pick up the load.
Last year Iola spent as much as $850,000 in a single month and this year budgeted $7 million for power, an average of $585,000 a month.
“If we weren’t a generating city, we’d be spending $11 million or more a year for power,” Philips said, which would mean significantly higher costs for consumers. Iola generators run during peak usage periods to replace purchased power.
Purchases through SEG have exceeded expectations for savings, he added.
Scott Shreeve, a Topeka consultant, helps with SEG power purchases, mostly through Westar, Kansas City Power and Light, and hydro power from Oklahoma. With no extended contracts, power is purchased monthly in varying amounts from those and other suppliers.
While peak demand varies, even during months when heat or cold dictate greater consumption, Phillips said Iola’s usage was fairly predictable.
“Peak usage mostly is because of residential consumption,” he said. “And that has gone down some because of the loss of the houses in south Iola from the flood.”
Demands by industries — Gates Corporation, Russell Stover Candies and others — and Walmart, the largest commercial consumer, are relatively stable throughout the year, making them a known factor.
However, Phillips cautioned, it doesn’t occur immediately.
“You don’t just turn on a switch and have power,” he said.
Before the first diesel generator is started — they go on line before the two big five-megawatt engines— crews have to clear lines and prep circuits. Then, generators are started one at a time and brought to full load before the next is added to the mix.
“We can probably have the first generator up and going in about 30 minutes,” Phillips said.
All told, the last house to be lighted is three hours out.
The electric elephant Behind the scenes of making power
