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KMEA tells Baldwin council GRDA allocation can be reduced; recommends 1.5–2 MW to balance cost and reliability
Summary
KMEA analyst Neil Daney recommended Baldwin consider reducing its GRDA allocation from 3 MW toward 1.5–2 MW to 'right‑size' its power mix, citing SPP performance‑based accreditation changes, market volatility (Winter Storm Uri) and the potential to monetize excess capacity.
A KMEA consultant told the Baldwin City Council the city should consider trimming its GRDA power allocation from 3 megawatts toward a 1.5–2 megawatt range to reduce long‑term cost exposure while preserving reliability.
Neil Daney, representing the Kansas Municipal Energy Agency, explained the three components of a municipal energy bill — capacity (demand), energy and transmission — and said accreditation changes at the Southwest Power Pool starting in 2026 could reduce the counted value of older local units. "For a city that has internal generation... a 1.5 megawatt allocation gets you around 30% of your annual energy needs," Daney said, recommending 1.5–2 MW as a practical range.
Daney walked the council through historical market volatility, noting the 2021 Winter Storm Uri period when SPP day‑ahead prices spiked and GRDA’s allocation helped offset extreme market charges. He said excess capacity is routinely sold to other members; current market prices for excess capacity were described as roughly $2.25 per kW‑month with forecasts rising to $6–$7.
Council members pressed for clearer numbers. Members asked how much the city currently pays under the GRDA arrangement and how internal generation and market sales would interact during extreme events; Daney said the city receives credit for transmission reserve and that internal generation can be financially beneficial when registered with the market. The presentation included modeling showing Baldwin’s capacity position could be "marginally thin" by 2028–2029 if older units receive large accreditation haircuts.
Council members agreed to take more time, plan a follow‑up meeting and gather specific cost calculations before deciding whether to extend or reduce the GRDA contract allocation at the next meeting.
Next steps: council scheduled a follow‑up discussion and asked staff and KMEA to produce detailed cost comparisons and the implications of different GRDA allocation levels on the electric fund and rates.
