The Gardner City Utilities Advisory Commission on Jan. 2 reviewed staff analysis and alternatives related to extending a power purchase agreement (PPA) with the Grand River Dam Authority (GRDA) and voted to postpone a recommendation to the City Council until its February meeting.

Staff presented historical cost comparisons and capacity forecasts for the city's existing GRDA PPA, which currently supplies 9 megawatts of paper capacity. The presentation said the original contract (entered through KMEA on May 1, 2005) covers capacity and energy through April 30, 2026, and that KMEA has asked member cities for approval in time for KMEA and GRDA to finalize agreements in March. Gons, a staff member, said the city must provide an answer by March 1 so KMEA can carry forward municipal approvals to its executive committee meeting later that month.

The presentation showed component costs for the GRDA contract: capacity charges of about $10.45 per kilowatt-month (roughly $945,000 per year), energy charges averaging about $40 per megawatt-hour, a power cost adjustment (PCA) that averaged about $2.6 million in recent years, and a KMEA administrative fee of about $129,000; staff summarized those elements into an average annual PPA cost of about $3.7 million. Over a proposed 25-year extension, staff estimated capacity at roughly $23 million, energy $65 million and administrative fees about $3.2 million, for a 25‑year total in the neighborhood of $92.5 million (figures were presented by staff and described as estimates).

Gons said the city’s electric master plan modeled alternatives, including upgrades to local gas turbines and increased solar, and expressed that the GRDA capacity component appears more costly when compared on a dollars-per-kilowatt-year basis. In the master-plan comparison cited by staff, upgrading Gardner City’s Unit 2 gas turbine was shown at about $95 per kW-year, solar at about $122–$125 per kW-year, a Unit 1 upgrade at about $146 per kW-year, and the GRDA PPA capacity at roughly $462 per kW-year.

Staff also presented five-year historical comparisons of GRDA costs versus the Southwest Power Pool (SPP) day-ahead and real-time markets. Gons told commissioners that, for the five-year window examined, the day-ahead market was slightly cheaper overall than the GRDA PPA by about $342,000, while the combined energy-plus-capacity difference favored the markets by roughly $5.1 million over five years; comparisons with real-time prices showed larger hypothetical savings in the period presented. Gons summarized: “The day-ahead market has outperformed the GRDA PPA except for 2021. The real-time market outperformed both DA and PPA in [multiple years].”

Commissioners pressed staff on several technical points and uncertainties raised in the presentation: how SPP accredits capacity during extreme weather scenarios, the expected accredited output from planned turbine upgrades, the status and duration of other PPAs (including a Marshall wind PPA and contracts with WAPA and other suppliers), and how projected peak demand under “extreme weather” forecasts would change reserve requirements. Staff said a Unit 2 upgrade has been approved by City Council and that vendor estimates indicate the turbine can be uprated in a range (contract testing is required to confirm exact output gains); staff recommended relying on a conservative 15% accredited improvement for planning purposes until final test data are available.

On the core policy question — whether to extend the GRDA PPA at the current 9-megawatt level, reduce to roughly 4.5 megawatts (staff’s recommended option), or accept another amount — staff framed the tradeoff as paying a premium for paper capacity that extends the city’s reserve margin versus relying more on market purchases (day-ahead/real-time) and local capacity upgrades. Staff said a 4.5-megawatt PPA would defer the need to procure additional capacity until later in the 2030s under the master-plan baseline but increases the risk of capacity shortfalls in extreme-weather scenarios; a 9-megawatt PPA reduces near-term risk but would cost roughly $5 million more over a five-year span in the historical comparison presented.

Rather than recommend immediate approval, commissioners voted to defer action for one month to allow additional review. A commissioner moved to “review this” in February; another commissioner seconded, and the motion carried (all in favor). Staff said it will circulate the presentation materials and any clarifying analyses before the next Utilities Advisory Commission meeting so commissioners can prepare a firm recommendation to forward to the City Council.

The commission and staff noted next steps include: (1) providing a formal recommendation to City Council (if the commission elects to do so after further review), (2) coordinating any municipal approval through KMEA so KMEA can present the city’s position to GRDA/KMEA’s executive committee, and (3) completing vendor performance testing for the planned turbine upgrades to confirm accredited capacity gains.

Questions and technical clarifications recorded during the meeting included whether GRDA and KMEA offer shorter-duration or lower-priced PPAs (staff said KMEA had solicited other PPAs but those offers were shorter term and, in the examples cited, more expensive on an energy-only basis), whether the city can renegotiate or scale a contract mid‑term (staff said that flexibility is limited and likely not available), and how fuel-cost pass-throughs (PCA) would affect actual payments over time. Commissioners asked for more historic comparisons beyond the five-year window presented; staff said additional historical analysis can be provided if commissioned.

Decision status: the commission did not approve an extension or authorize Council action on a specific contractor amount; it postponed the recommendation to allow more time for analysis and for commissioners to review materials before the February meeting.