Smaller electricity bills may be in Dover’s future

DOVER — City of Dover power customers could pay less for electric service beginning June 2021.

City Manager Donna Mitchell said recently approved energy contracts included lower than usual market prices, although she could not disclose the locked-in pricing due to confidential and proprietary reasons of the open market.

The agreements entered into on Jan. 15 involved providers Calpine (20 megawatts of capacity, 10 megawatts of energy to produce electricity) and Public Service Energy Group (40 megawatts of capacity).

“This contract is lower than the average price we have in our portfolio today and will reduce average costs,” said Ms. Mitchell.

Donna Mitchell

North American Energy Services will operate the plant, she said.

In the summer of 2016 the city commissioned The Energy Authority to provide an Integrated Resource Plan given the aging state of the city’s power plants, Ms. Mitchell said.

“This document was to provide the city with forward-looking power supply projections and the city’s alternatives to meet those needs,” she said. “Consideration was given to the age and condition of our current generation assets, capital cost, regulatory changes, renewable energy sources, and capacity and energy markets.”

Aging McKee Units 1 and 2 were shuttered on May 31, 2017. (The McKee Run Generating Station is on Buttner Place and the VanSant facility is at Schutte Park.)

“Based on the recommendation in the TEA Report the City issued a Request for Proposal for Power Supply in August 2018,” Ms. Mitchell said. “Upon receipt of the proposals, city council authorized the city manager to enter into capacity and energy contracts based on best and final pricing on Jan. 14, 2019.

“Indicative prices from the proposer’s were discussed in executive session with city council. The city has just recently finalized the contracts and is now in the process of communicating this decision to the operator of our generating plants and city staff.”

The city will continue providing supply support when called on in the PJM Regional Transmission Territory through May 31, 2021, Ms. Mitchell said.

“In the meantime, we will be developing plans for decommissioning McKee Unit 3,” she said. “The city completed an overhaul of the VanSant Unit 11 in fiscal year 2017 and will continue to operate that unit.”

In 2018, according to Ms. Mitchell, the McKee 3 unit was engaged for 520 hours and Unit 11 VanSant at Schutte Park covered 192 hours. VanSant’s use went through PJM 95 percent of the time, while McKee 3 covered PJM economic/reliability runs about 50 percent.

Ms. Mitchell said city air requirements brought the other 50 percent of McKee runs. Though the cost of running on natural gas is more cost-effective, oil use is also possible, she said.

Penalties could possibly run from thousands to millions of dollars if the city can’t run when required or a breakdown causes an outage after the units are engaged, Ms. Mitchell said. The cost would be determined on market prices, hours the system is incapacitated and/or effect on the load system, according to the city manager.

Delaware State News staff writer Mike Finney can be reached at mfinney@newszap.com.

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