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Archive for April 23rd, 2009|Daily archive page

Solution to downtown steam troubles now focusing on public dollars to rebuild Alliant’s Sixth Street plant as it was — as a coal plant

In Alliant Energy, Monica Vernon on April 23, 2009 at 5:51 pm

Federal, state and city officials all are looking hard to see if an infusion of public dollars could rebuild Alliant Energy’s flood-damaged Sixth Street Generating Station to what it was.

That is, a coal-fired plant delivering relatively low-cost steam for heat and other uses for the downtown and the near downtown, vital industries nearby, including Quaker and Cargill, the hospitals and Coe College.

Tom Aller, president of Alliant subsidiary Interstate Power & Light Co., emphasized in comments to The Gazette’s editorial board on Thursday afternoon that Alliant as a private utility cannot and is not seeking public financial support to rebuild the Sixth Street plant as a coal-fired plant.

At the same time, Aller said that Lt. Gen Ron Dardis, head of the Rebuild Iowa Office, City Council member Monica Vernon, who is heading up a council “steam team,” and others have talked to Alliant Energy recently about what options the utility had given customers if the Sixth Street station was rebuilt as a coal-fired plant.

Aller said he suggested soon after the June 2008 flood that public officials ought to consider the issue of rebuilding the Sixth Street plant through the prism of economic development for the city. He said public officials are now doing just that.

The city’s Vernon on Friday afternoon acknowledged that there is now a flurry of discussion on the federal, state and city level over rebuilding the Sixth Street power plant as a coal plant to provide steam.

“There are more alligators in this thing,” Vernon said. “It’s potentially doable.”

She said the Iowa Department of Economic Development may be looking to contribute $16 million to such a plan and, additionally, that U.S. Commerce Department’s Economic Development Administration could be a funding source. Some city dollars would be involved, too.

In early 2009, the Sixth Street Generating Station’s eight largest customers, which have used most of the plant’s steam, rejected Alliant’s proposals to rebuild the plant as a coal plant because the proposed future steam rates, which would have had to cover the capital costs of rebuilding, were too high.

Aller said an infusion of public dollars to pay to rebuild the plant or to pay much of the cost of rebuilding it would allow Alliant to provide steam rates lower than had been proposed and lower than the current sky-high rates, which this winter were part of a temporary steam system using natural gas. With public dollars used for rebuilding, steam rates, though, would be higher than they had been before the flood, he said.

Dee Brown, Alliant’s regional director of customer operations, was much more direct that Aller when she said, unequivocally, that rebuilding the Sixth Street Generating Station as a coal plant is the only real long-term solution for the customer group — Quaker, Cargill, the hospitals, Coe College, the downtown and others — that has depended for many years on the steam plant and the steam pipeline system running from it.

Alliant could rebuild the coal-fired plant in a year, Brown said, while other long-terms solutions — one idea is to build a $250-million waste-to-energy plant — would take five or more years.

The biggest customers like Quaker and Cargill, upon which holding the group of steam users together depends, aren’t going to wait five or more years for a long-term solution, Brown said.

Aller said Alliant believes it can rebuild the coal-fired plant with new, reconfigured equipment with a natural-gas backup that will allow the plant to meet federal emission standards into the future.

Such a coal-fired plant would provide a reliable energy source with stable steam rates, which come with burning coal, and the plant also would provide a redundant natural-gas backup system, Aller said.

In recent months, much of the discussion in and around City Hall has centered on figuring out a short-term solution — perhaps subsidizing current high steam rates associated with Alliant’s interim, natural-gas system for five years — while an effort was made to come up with a long-term solution.

Aller said it has been clear to him that no one will spend money on a short-term solution unless there is a clear, long-term solution in place. He said state officials seem to agree with him on that now.

The city’s Vernon said the city is still working to begin a long-term study on a “green,” waste-to-energy power plant. But she said such a system might be appropriate elsewhere even if public money is available to help rebuild Alliant’s coal-fired Sixth Street plant as a coal plant.

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