Sturgis approves $10.8 million contract for natural-gas generator project

The Sturgis City Commission on July 14 approved an engineering, procurement and construction contract for a natural-gas–fueled generation project and a separate contingency budget to move the project into procurement.

City staff said the project, included in the fiscal year 2027 capital budget, will add three reciprocating engines with a combined output of about 7.5 megawatts and will use natural gas as fuel. City presenter Chris said staff selected the Fawn River substation site because of its proximity to a high-pressure gas line and that the project has a renewed operating rating permit from EGLE. "This contract is required to move forward for procurement of the engines and equipment needed to complete the project," Chris said.

At the meeting a commissioner moved to approve the agreement with McCallis and Cat in the amount of $10,785,000; the motion passed by voice vote. The commission also approved a 5% contingency of $539,250, which staff said will cover procurement contingencies.

Staff told commissioners the Michigan Public Power Agency helped model the project’s value to the city through capacity offsets and potential transmission-cost savings; additional agreements to be brought back include operation and maintenance, a long-term service agreement and a monitoring/dispatch agreement.

The vote authorizes staff to proceed with ordering equipment and advancing the procurement process. Commission discussion focused on project scope, permitting and future agreements; no member registered an objection during the recorded voice votes.

Next steps listed by staff include finalizing the procurement paperwork and returning to the commission with O&M and service agreements prior to entering long-term commitments.