Steamboat Springs The planned upgrade to Oak Creek's new power-generating system to ensure it can put energy on an electric power grid is a good example how difficult it is to get into the energy business, Western Area Power Administration Engineer John Wetzel said.
Recently the town realized it had to put $20,000 more into its power generating system in order to adhere to safety regulations. The town had to add communication upgrades so system operators will know if the generator is putting energy on the grid.
The generator itself runs fine and no work has to be done to it.
"The work we're going to do is on the substation, not the generator," Oak Creek Director of Public Works Chuck Wisecup said.
The substation is north of Oak Creek and the generator is several miles away, on the corner of County Road 27 and Colo. 131.
Wisecup still isn't sure where the breakdown in communication about the regulations occurred.
Miner and Miner Consulting Engineers Inc. were the engineers on the project but didn't inform the town about the safety regulations. Neither the engineer in charge nor his supervisor could be reached for comment.
The regulation requiring grid operators to be informed about a generator is one that every town like Oak Creek has to follow.
"There are some requirements that everybody has to agree to," Wetzel said. "You can't just plug in and say, 'Here I am.'"
Every generator needs to send information about whether it's online, he said.
LaVerne Kyriss, spokeswoman for the Western Area Power Administration, said there are many regulations that must be looked at before a generator goes online
The power administration owns and operates a large part of the transmission systems in Colorado, including the system that goes into the Oak Creek, she said.
In addition to having communications, Kyriss said the power administration needs to have the ability to turn off a generator in an emergency situation.
"I understand why Oak Creek would buy a generator and want to sell excess energy," Kyriss said.
The agreement the town entered into with the Nebraska Municipal Power Pool can produce good payoffs, she said. Town officials expect the generator will produce about $2,100 a month in sales of excess power.
However, it would have been beneficial for the town to check with the Western Area Power Administration before it purchased the generator, Kyriss said.
Either way, the extra $20,000 for the substation would have been needed whether Oak Creek officials knew about it in advance or not. And, the cost of the upgrade is less than that for other substations in the state to bring them into compliance with the same regulation.
Normally the power administration requires substations to use a microwave communication system, Kyriss said. Since Oak Creek is in a valley, the more expensive wireless system wouldn't work and the substation had to be equipped with phone lines.
The town is going ahead with the upgrade some criticism from Oak Creek residents. At a recent town meeting, Charles Norris said the town should cut its losses.
Mayor Deb Van Gundy said the generator may have been a mistake, but Oak Creek needs to follow through on its investment.
"Because of the significant investment already in the plant, it would be impractical not to complete the project," she said.
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