City signs hydroelectric contract
At the April 4, 2016, meeting of the Libby City Council, the council voted to approve a contract with Flathead Electric Cooperative Inc., which will enable the city to generate electricity and sell it to the cooperative to offset some of the city’s metered electricity usage.
“This is a really good thing for the city,” said City Council President Brent Teske. “Everyone’s trying to do the green thing these days and this is a chance for us to do it and generate some long-term cost savings for the city while we’re at it.”
Under the terms of the deal, Flathead Electric Cooperative will pay the city $122,125, which will be used to install a a 20 kilowatt name plate micro-hydroelectric power generation unit. The unit will be installed near the city’s water treatment plant with an expected operation of between 12 and 17 kilowatts.
The contract is divided into three phases: Commercial Startup, Phase I and Phase II. The startup phase is defined in the contract as the period between the contract’s execution and the point at which the city begins generating and delivering electricity to Flathead Electric Cooperative. The contract requires delivery to begin no later than one year from the date of the contract’s execution.
Phase I of the delivery term begins upon the initial delivery of energy from the city’s unit to the company. It encompasses the period of initial repayment of the $122,125, which will come in the form of 2.03 million kilowatt-hours of electricty. The first phase has an anticipated duration of roughly 13 years, although it could be longer or shorter depending upon dam flow and power generation.
The second phase of delivery period will last from the end of the first until 20 years from the date of initial power delivery. During the second phase, city power bills at between one and three city facilities, including the water treatment plant, will be offset by the energy generated from the new facility.
The city agreed to repay the initial investment with the sale of 2,035,417 kilowatt-hours of electricity. The contract stipulates that all financial considerations after the initial payment will be limited to off-sets and both parties agreed to adjust the allocations to ensure that the city’s generation never exceed consumption at the off-set meters in the city.