Bluffs gets MidAmerican's $1.4 billion power plant
omaha.com
BY STEVE JORDON AND DAVE MORANTZ
WORLD-HERALD STAFF WRITERS
MidAmerican Energy
COUNCIL BLUFFS - Iowa took another step Monday toward becoming self-sufficient in electric power as MidAmerican Energy announced that it would build the state's largest generating plant at its Lake Manawa property in the Bluffs.
MidAmerican Energy's existing Lake Manawa facility would more than double its capacity when the new plant's 900-megawatt generators come online in the spring of 2007.
Plans for the $1.4 billion coal-burning plant got an enthusiastic reception from political leaders, even though MidAmerican has yet to begin the process of gaining official state and federal government regulators' approval.
Iowa House Speaker Brent Siegrist, R-Council Bluffs, said the state wanted to encourage such projects when it changed the law last year to streamline the plant-selection process for power companies.
Since the law passed, MidAmerican has announced the new Bluffs plant and a natural gas-fired power plant at Pleasant Hill, near Des Moines, and Alliant Energy of Wisconsin has said it plans to build a new plant in Iowa.
The law, Siegrist said, "did exactly what we thought it would do. We wanted to make Iowa the place where power companies want to build."
Otherwise, he said, MidAmerican's new plant - expected to employ 1,000 construction workers and pay them $300 million in wages - might have ended up in another state, along with the completed plant's 77 permanent jobs and its annual $4.8 million payroll and $3.5 million in property taxes.
And Iowa customers might have watched their electricity rates bounce up and down as their power companies were forced to buy large amounts of electricity from out-of-state power generators.
Instead, Siegrist and other leaders said Monday, the MidAmerican project and other new plants will give Iowa a stable, reasonably priced supply of electricity, subject to rate-setting oversight by the Iowa Utilities Board.
"This will be a big benefit for our state and our city for many years to come," Siegrist said.
A computer rendering shows how the existing plant, left, and the proposed, larger plant to the left.
Existing power generators at the Lake Manawa facility can generate about 800 megawatts of power. Construction on the new 900-megawatt facility would start in late 2003 or early 2004 and be completed in the spring of 2007. The new plant would provide enough power for about 300,000 homes.
The combined 1,700 megawatts at the Bluffs facility would account for one-third of MidAmerican's Iowa capacity, slightly ahead of its largest plant, the 1,600-megawatt plant near Sioux City. MidAmerican had considered building the new plant near its facilities in Sioux City and Muscatine and at two other unnamed Iowa communities.
MidAmerican picked the Bluffs location because two railroads - Union Pacific and Burlington Northern Santa Fe - compete for hauling coal to the site. In addition, the Missouri River provides a reliable source of water to cool electrical generators, and the 146 existing MidAmerican employees provide an experienced work force.
Iowa acted wisely to encourage new plants, said David Sokol, chairman and chief executive of Des Moines-based MidAmerican. Although customers might be happy to buy power cheaply from other states, he said, they could run into problems when electricity becomes scarce or expensive.
"That's a very dangerous fence to straddle," Sokol said. "This can keep the state from having to import power."
Sokol and other officials discussed the expansion plans at a press conference at Iowa Western Community College. About 125 people attended, including members of the Council Bluffs Area Chamber of Commerce and the International Brotherhood of Electrical Workers, which will have union members operating the new plant.
Emil Pavich, a Bluffs city councilman, said the construction jobs alone are valuable.
"And it's not just Council Bluffs that will benefit from the spending," Pavich said. "I saw people here today from Mills County and Glenwood. Bellevue and Omaha will get boosts."
Bluffs Mayor Tom Hanafan credited the City Council and staff members with working to land the project. The city started its campaign last summer after the change in state laws.
Despite the Bluffs' favorable location, Hanafan said, staff members had to overcome limitations, such as uncertainties about Missouri River water levels, the temperature of discharged water and access to the new plant. As part of the deal, Council Bluffs will build a new road to the plant.
"There were also some things that weren't in our favor," Hanafan said. "And our folks worked long and hard on those. I thank them for that."
Iowa Gov. Tom Vilsack said in a press release that affordable electricity for businesses and consumers is critical to the state's economic development. "Today's announcement by MidAmerican Energy to generate additional electric power in Iowa will have a significant positive impact on Iowa's economy."
MidAmerican, a subsidiary of Berkshire Hathaway Inc. of Omaha, would build and operate the new plant if it wins approval from state and federal energy regulatory agencies.
Jack Alexander, senior vice president of supply and marketing, said MidAmerican would use 350 to 450 megawatts for its own customers. The rest would be sold to other electricity providers, especially rural and municipal power companies that would become part-owners of the plant.
Union Pacific Railroad of Omaha signed a seven-year agreement to supply 13 million tons of coal a year for MidAmerican's Iowa plants. The new plant will need about 4 million tons a year.
Dick Davidson, Union Pacific's chairman and CEO, attended the press conference and said afterward that he hoped the railroad would win that contract. "Whatever it takes," he said with a smile. "We're just here to serve."
Alexander said that while the plant could be built to generate as much as 1,200 kilowatts, the most likely figure is 900 kilowatts, based on preliminary reactions from the power companies. He said some of the plant's electricity could be sold in Missouri, Kansas or Wisconsin, but not in Nebraska, a public-power state where generating plants are governed by elected boards.
Initial estimates put the cost of the plant at $1.1 billion and the capacity at 960 megawatts, but Alexander said the current estimates are more realistic and based on the latest prices for equipment, demand for power and other aspects of the project.
Other MidAmerican generating plants may shut down in years to come, he said. Two of the existing Lake Manawa generators, for example, were installed in 1954 and 1958. The two plants, which can generate about 130 kilowatts, produce more fuel emissions than the 900-megawatt new plant, he said, because new equipment uses the coal more efficiently.
The new plant also may sell steam to commercial customers that could situate facilities in a nearby industrial park, although no firm agreements are in place. Alexander said the plant would need new transmission lines to carry the added electricity to its customers. |
