SKF Courts Power Plant Project

SKF Courts Power Plant Project Kingsburg could be the future home of the KRCD community power plant if the SKF board of directors is successful in its attempts to lure the 500-megawatt, natural gas-fired power plant away from the city of Parlier. At the request of the SKF board, a joint meeting was held with the KRCD (Kings River Conservation District) board last Thursday to see what it would take for KRCD to decide that a partnership would be in everyone's best interest. KRCD originally approached SKF in March of 2005 with the idea of building a base-load power plant on SKF's property, but after a year's worth of negotiations, KRCD pulled out. Instead, it decided to set up shop on Bethel Avenue, between Dinuba and Manning avenues in Parlier. When the SKF board invited the KRCD board back to the table last week, it was to see what happened to drive KRCD away, and to see if reconciliation was a possibility."Some of us board members didn't like what happened the last go 'round, so I thought we should take another look," said SKF Director and Kingsburg Mayor Leland Bergstrom. KRCD Board President Mark McKean said that while it had seemed like a perfect partnership at first, the proposal provided by SKF staff in March of 2006 was too far out there. It listed a number of terms and conditions that KRCD was not willing to consider. McKean went on to say that the partnership it has formed with the city of Parlier has been a positive one, and they would not back out of that deal without careful consideration. "We are quite a ways down the road with Parlier, and that is what we are dedicated to today, unless we have good reason to look elsewhere," McKean said.The main reason that KRCD originally approached SKF, and the reason they may now be reconsidering, is that SKF has water available to cool the proposed power plant. The plant would use SKF's wastewater and treat it to tertiary standards, meaning that it would undergo additional filtration and solids removal.Another benefit for KRCD to build on the SKF property would be the close proximity of high-voltage power lines. The pond effluent charge, or cost of the water, was originally proposed to be $100 per acre foot, but the KRCD board made it clear at the meeting that in order for them to consider moving the plant to Kingsburg, SKF would have to match Parlier's price of $25 per acre foot. According to SKF General Manager David Michel, SKF's annual revenue for selling water to KRCD, should the plant be built at SKF, would be about $90,000. Michel said the major benefit to the district's users would be KRCD's purchase of SKF wastewater, which would provide extra capacity in the treatment plant for effluent disposal."In other words, we won't have to build so many new disposal ponds," he said.The added revenue and capacity would help keep user rates lower. The meeting concluded with the KRCD board leaving the SKF board to decide whether or not it could live with the terms as set forth by KRCD."We're at the point now where at the end of this meeting, the ball will once again be in your court," said McKean.He added that KRCD needs to act quickly, because deciding to move the plant this late in the game would put it further behind schedule.The SKF board convened to closed session, at which time it gave direction to staff regarding the sale of the property."They [the board] did direct me to negotiate further with KRCD," Michel said on Friday.Michel anticipated that there would not be a response from KRCD until sometime this week.Should KRCD decide to purchase the 20 acres near Kamm Avenue between Bethel and Del Rey, it would be for the appraised value of the property. The KRCD community power plant is a base-load power plant designed to run 24 hours a day, seven days a week and operate more efficiently than plants designed for peak operation. Electricity from this plant will be sold at a reduced rate compared to investor-owned utilities because KRCD is a local resource agency that does not have a profit motive and is able to obtain tax-exempt financing. Bergstrom said that in pursuing a partnership between SKF and KRCD, he is confident that the lower sewer and electricity rates will benefit Kingsburg residents."There are some very definite breaks there for us," he said. Construction on the power plant would get underway in 2008, with operations not set to begin until late 2010.