IPL Master Energy Study - What's Involved?

The City Council will receive a long-waited new Master Energy Study which will provide recommendations on the best, most economical way to provide and secure electrical power over the next 20 years.

Acting IPL Director, Andy Boatright provided the City Council an update at its Jan. 8 study session.

The big question is: What is the future of the Blue Valley Power plant on Truman Road?

The city-owned power plant has three steam-generating units which currently use natural gas. The generators date back to 1958 and 1965.

The Blue Valley power plant generated only 1.73% of all IPL energy in 2016. (See Table 2 from Request for Proposal for the master energy study).

Last February, city staff presented a five-year capital improvement plan, surveying all city needs, including those involving IPL. The document called for planned expenditures of $135 million to refurbish the Blue Valley plant and another $135 million for six combustion generators. (Exhibit 4: City Manager's Report on Deferred Maintenance, Feb. 9, 2017)

A recent management performance report on IPL commented:

"Stagnant economic development results in no growth in transmission or distribution assets and diminished workload for the labor force that maintains those assets. The challenge will be to right size the labor force in the short term to match service demand and to shape the profile of the workforce in the longer term to match the power availability/reliability strategy selected for the future."

That audit's executive summary concludes that the city utility is "at a crossroads" because its current 193 megawatts (MW) of generating capacity is within "five years of end of life."

The Master Energy Study, scheduled for completion by May, is being conducted by Burns and McDonnell at a cost of $325,000.

What is a stake?: If major capital investments are made in Blue Valley power plant, we can expect those major capital expenditures to result in higher electrical rates.  Overall, the future direction of our city-owned utility is at stake; which impacts both customer rates and city employee jobs.