The Village of Genoa is expected to benefit soon from its relationship with the Fremont Energy Center.
“We will be buying power from them at a discounted rate,” Village Administrator Kevin Gladden said, adding the move is made possible through the village’s membership in American Municipal Power Inc.
AMP Ohio bought the power plant last year from FirstEnergy. The plant, a 707-megawatt natural gas combined cycle generation plant, was owned by the Calpine Corp., which went bankrupt in 2005. AMP had attempted to buy the plant at that time but lost out to the FirstEnergy bid.
Then the plant’s ownership came into play again last year. AMP Ohio completed the sale negotiations in mid-2011 and began testing late in the year.
According to the AMP Website, the Fremont Energy Center fits well with AMP’s overall power supply strategy of reducing its members’ long-term reliance on wholesale power markets through development of diverse generation assets.
AMP members presently rely on the wholesale market for more than 90 percent of their intermediate power supply needs. Based on AMP members’ long-term power supply analysis conducted by R.W. Beck, the Fremont facility would provide a cost-effective alternative to wholesale energy and capacity markets, according to the website.
AMP began testing at the Fremont Energy Plant in the fall. Initially, there was no intention of buying or selling any energy produced during testing phases, Gladden said.
“But the testing went so well they decided to offer the energy for sale,” he added.
The village of Genoa, along with other AMP members, recently participated in a conference call regarding the opportunity.
The original contract needed to be amended to allow the buying or selling of energy and the membership had to agree on it, Gladden explained. The move will allow the company to sell the power produced during testing to its membership as well as others, Gladden explained.
Oak Harbor and Elmore are also members of the AMP consortium.
Analysis indicates that when compared to natural gas combined cycle alternatives, the Fremont facility would provide a $350 million savings to participating AMP members over 30 years, as well as a favorable energy market location and fuel supply option, according to AMP officials.
“Most of the people I know in the electric power industry are building natural gas plants,” said Jay Apt, a professor of technology at Carnegie Melon University in Pittsburgh, who was recently interviewed by the Associated Press regarding the changes in the power industry. That’s because of low prices over the past few years and the relatively low cost of building such plants, compared with coal-fired plants or nuclear.
The Fremont Energy Plant’s construction was nearly complete when AMP took possession.
But Apt cautions that trend could stall because of supply and demand; if too many plants embrace cheap gas, it won’t stay cheap.
The surest route to $6 or $8 gas is for everybody to plan on $4 gas,” Apt said in the AP article. “And if prices do rise, coal will again be the most cost-effective fuel. Natural gas is priced per million BTU.
Apt noted that there was a “huge building boom” in natural gas plants from the late 1990s to 2004, because utilities thought they would get rich from the combination of cheap fuel and plants that were highly efficient and relatively cheap to build. There were predictions that prices would stay low over the long term, too.
But natural gas prices spiked, and the new gas-fired plants around the nation stayed idle much of the time. That trend was also driven by another irony: The gas-fired plants are easier to start or stop compared with coal or nuclear, so many utilities used them just for peak electric demand periods.
Genoa will receive 1.22 MW, or about 0.18 percent of the plant’s capacity.
Mayor Mark Williams said the power purchased from this project will help lower our costs as
"We will not need to go to the open market to purchase intermediate power at a higher rate. We also may have saved cost over runs and potential risks as this plant was substantially completed when purchased,” he said.
The Village of Genoa has removed two traffic signals from the 13th and Main streets intersection.
“There is really no use for them now that the school has been sold,” Village Administrator Kevin Gladden said.
The signals were located near Brunner Elementary School, which the Genoa School District closed last year and sold to a local businessman. He intends to renovate the building into a recreational hall and some kind of office facility, according to previous interviews.
The lights had since been on the flashing mode, Gladden said.
Those two traffic lights will be used to replace others in the village.