Beatrice studies municipal power plant as 2031 reserve rules loom

Beatrice Mayor Bob Morgan said the city has hired HDR of Omaha to conduct a comprehensive study on whether to build a municipal power plant that would secure local electricity supply and limit future rate increases.

The study will evaluate generation equipment, plant size and business models, including whether to build capacity for Beatrice alone or to bring partners on board to achieve economies of scale. "We hired HDR out of Omaha. They're going to evaluate our electrical generation outputs or our equipment and do a comprehensive study to think about building an electrical generation plant here in Beatrice," Morgan said.

Why it matters: Morgan said the city's current power contracts run through Dec. 31, 2030, and regional rules and market conditions are changing in ways that could raise the reserve margin cities must maintain. "A lot of the regional ... are going to take that reserve in 2031 from a 10% reserve to about a 35 or 36% reserve," he said, adding that the change means the city needs additional capacity or arrangements to avoid shortages.

Morgan used a simplified example to illustrate scale, saying a 50-megawatt peak demand would require planning for roughly 10% additional capacity today and a substantially larger buffer under the expected 2031 rules. He emphasized equipment lead times: key generation components typically have four-to-five year delivery lead times, which is why planning must begin now.

The mayor said the HDR study will also model costs and potential partner arrangements. "No, not yet. That's part of the study," he said when asked whether there is a price tag. Morgan said preliminary work suggests the city might realize long-term savings if it builds local generation rather than purchasing all capacity on the open market, but he declined to provide numerical estimates pending HDR's analysis.

Morgan also noted the city already uses local wind generation and participates in hourly buying and selling through the Southwest Power Pool; the new study will consider how local generation would interact with those sources and regional markets. He said the city has been studying the question for about a year to a year-and-a-half and has talked with other communities that may buy power if Beatrice builds larger capacity.

Next steps: HDR will complete the study and present options to city leaders. Morgan said the aim is to prepare the community for the 2031 contract shift without reacting at the last minute.

(Reporting note: quotes and details in this article come from Mayor Bob Morgan during an Ask the Mayor radio interview on KWBE.)