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Utility staff brief council on capacity shortfalls and offer of used generators as market prices for capacity rise
Summary
City utility staff warned of tighter capacity after performance‑based accreditation derated generators, noted KMEA capacity prices will rise to $5/kW‑month, and presented an optional purchase of used 2‑MW units ($380,000 each) to bolster reserves; council asked staff to study costs and timing.
A technical briefing to the Baldwin City Council detailed growing capacity pressure on the local grid and presented a possible acquisition of used generating units.
Utility staff explained that performance‑based accreditation implemented in 2023 reduced some units’ claimed capacity because the accreditation factors historical availability into the figure. The city added two 2‑MW units earlier this year that avoided an immediate capacity deficit, but staff warned the downtown plant’s oldest units and switchgear are decades old and represent a future risk.
The utility official said 11 used 2‑MW Cummins units were available as a package at $380,000 each delivered, with estimated hook‑up and installation costs at roughly $400,000–$450,000 per unit depending on siting and infrastructure needs. "These units fit almost all of the boxes," the official said, noting they are containerized, the correct voltage and have 48‑hour belly tanks for fuel at full load.
Staff also noted a market change: beginning May 1 KMEA capacity trading in the region will move from about $2.25/kW‑month to $5/kW‑month, increasing the value of owning accredited capacity. The official said newly added units would likely be derated initially until a performance history is built and cautioned that installation lead times and permitting can make new capacity take years to enter service.
Council members asked staff to further model payback, accreditation impacts and siting options. No purchase was approved; council requested additional cost modeling and timing scenarios.
