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Utilities Commission briefs council on proposed $18–20M generation project backed by SIMPA contract
Summary
Utilities Commission presented a proposal to build an additional dispatchable generation facility under a 20‑year capacity contract with SIMPA; the project would likely be funded by a revenue bond with the contract payments covering debt service and could yield more than $1 million a year to the city, officials said.
A Utilities Commission representative updated the council on a multi‑year opportunity with SIMPA to secure a 20‑year capacity contract and expand New Prague’s dispatchable local generation capacity.
The commission described an estimated project cost in the neighborhood of $18–$20 million for a new facility sited near the city’s west substation. The commission said SIMPA would offer a capacity contract that would make annual payments sufficient to support bond debt service; staff estimated the new asset could produce more than $1 million a year in revenue to the city under the contract structure. The proposal would be financed with a revenue bond (an electric revenue bond) rather than the city’s general‑obligation debt, and SIMPA’s contract payments would be the pledged revenue source for the debt service.
Commission and staff emphasized the reliability benefit: dispatchable generation helps back up wind and solar when weather or transmission outages reduce output, and the city’s existing facility has provided shorter outage durations for residents. Staff said lead times on generation equipment are long (about three years) and that bonding and procurement decisions will be needed within roughly a year if the city wishes to move forward.
Councilmembers asked technical and financing questions and generally indicated support for continued evaluation. Staff will pursue more detailed bond counsel and contract documentation and return with formal proposals and legal review if the commission advances to a funding request.
