Council adopts PPA extension with GRDA for 4.5 MW after debate over contract length and risk

The council adopted Resolution No. 2,164 authorizing a power purchase agreement (PPA) extension between the Kansas Municipal Energy Agency (KMEA) and the Grand River Dam Authority (GRDA) for a specified 4.5 megawatts of capacity.

At a previously tabled meeting staff revised and redistributed a presentation and returned with a recommendation based on the city’s projected needs. Staff explained an alternative approach previously recommended by KMEA and a consultant would have procured 9 megawatts for a longer term; staff recommended committing to 4.5 megawatts and filling additional needs in the day-ahead market and from the Unit 2 upgrade (staff projected about 2.4 megawatts from that upgrade). Staff also added a note to the revised presentation that market credit/availability rules discussed at a KMEA presentation could impose a derate or “haircut” (staff said a 10% average haircut had been discussed, with the possibility of 20–30%) on units that are not consistently available; the exact procedure was not final at the time of the meeting.

Council members discussed the tradeoffs: one councilmember argued the city would likely overpay for multi‑decade assurances if it bought the larger block, while others said energy markets are changing rapidly and a conservative approach may be warranted. Several council members expressed consensus on the 4.5-megawatt recommendation and to avoid the extra three years that would have been included in the 9-megawatt scenario.

Councilmember Baldwin moved to adopt Resolution No. 2,164; Councilmember Deaton seconded. The council recorded affirmative votes during roll call: Councilmember Weade (yes), Councilmember Schuh (yes), Councilmember McNair (yes), Councilmember Baldwin (yes) and Councilmember Bee (yes). Resolution No. 2,164 passed.