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New Prague council acknowledges utilities commission plan for 11.3 MW generation plant, authorizes future bonding steps
Summary
Council approved resolutions acknowledging the utilities commission’s plan to add 11.3 megawatts of dispatchable generation, estimated at $18–20 million, to meet regional capacity requirements under a 20‑year contract offered by SIMPA; staff said bonding will be done in 2026 and the project would be largely paid by the capacity contract revenues.
The New Prague City Council on April 7 approved resolutions to authorize the New Prague Utilities Commission to proceed with planning for a local generation plant intended to add about 11.3 megawatts of dispatchable capacity.
A utilities representative explained the project and financing plan, saying the commission had bid the engine package and estimated total project costs between $18 million and $20 million. The addition is intended to satisfy capacity needs and state-era mandates around grid reliability; the project would be funded through a 20-year capacity contract offered by the Southern Minnesota Municipal Power Agency (SIMPA). The speaker said the contract carries approximately $1,425,000 a year in capacity payments that will be used for bond debt service and that, after bonds are paid, the plant could produce net revenue to the utility of roughly $1.3 million a year.
Staff and the commission told the council that engines and long-lead equipment orders have already been placed and that construction of the building portion would not begin until mid-2026; bonding to finance the project is expected in early 2026. Council members asked about operational details, staffing and whether local generation would be available first to the city in an outage. A resident, Jerry Menard, asked whether city customers would receive priority service in an outage; staff replied the city would be the priority and that local generation improves outage resilience.
Council approved two related resolutions: one authorizing the issuance process and acknowledgement of bids and another declaring the city’s official intent to reimburse certain expenditures from future tax-exempt bonds. Staff said the Utilities Commission will return with formal bond documents and sale timing in 2026.
Next steps: The commission will continue equipment procurement and go forward with a formal bond process in 2026; staff will report back with bids and a recommended award.
