Municipal Utilities & Community Wind

1. Municipal Utilities &Community Wind Colin Hansen Executive Director Kansas Municipal Utilities Kansas Community Wind Workshop Cloud County Community College Concordia, Kansas October 31, 2006

2. Statewide trade association for municipal utilities • Electric • Natural Gas • Water • Wastewater • Telecommunications • 171 communities operating one or more municipal utilities • KMU formed in 1928 • Headquartered in McPherson

3. 2006 Membership

4. Public Power in Kansas • 120 municipal electric utilities • Largest: Kansas City BPU (65k meters) • Smallest: City of Radium (23 meters) • Median: 879 Customers • Approximately 18% of Kansas citizens served by a municipal utility • 2 “joint-action agencies” • Kansas Municipal Energy Agency (KMEA) • Kansas Power Pool (KPP)

5. Public Power in Kansas • 63 municipal utilities have generating facilities • City power plants • Primarily utilized for peaking or reliability purposes • Typically inefficient (and expensive) natural gas or diesel engines • Recent rise in cost of fuel has made operating these plants very costly

6. Power Supply Contracts • Baseload Generation • Kansas City BPU is only municipal with actual baseload capacity • Nearman Power Plant (coal) • Wholesale Power Customers • Full-Requirements Contracts • Partial-Requirements Contracts

7. Power Supply Contracts • Full-Requirements Contracts • Purchase all their electricity through exclusive contract with supplier • Westar, Aquila, Kansas City Power & Light, Sunflower, Midwest Energy • Often smaller cities • Haven, Hillsboro, Holyrood, Isabel, LaHarpe, Lindsborg, Lucas, Luray, etc.

8. Power Supply Contracts • Partial-Requirements Contracts • Utilize city power plant to lower cost of power supply • City generates during peak periods • Some outside power may come from other sources • Western Area Power Administration • Southwestern Area Power Administration • Municipal Energy Agency (KMEA, KPP) • Typically larger cities • Herington, Hoisington, Holton, Horton, Hugoton, Iola, etc.

9. Right Time for Community Wind? • Increasing Wholesale Power Costs • Power supply costs for some cities may double over next several years • Wind energy economics becoming more and more attractive • Existing Power Contracts Terminated • Transmission Constraints • High Fuel Costs • Need for Economic Development

10. What is Needed? • Education • Skepticism of Wind Energy Remains • Reliability Questions • Capacity (Peak Day) Mindset • Incentives (Iowa, Minnesota) • Technical & Financial Assistance • Numerous Duties of the Typical Municipal Utility Manager • Support from Electric Suppliers • Load Following Service • Impact on Existing Power Supply Contract • How to Accommodate Wind Energy?

11. What is Needed? • Transmission Issues • Interaction between municipal utility, incumbent power supplier, and Southwest Power Pool • Municipals = transmission dependent utilities (TDUs) • Kansas = transmission constrained • Impact on wholesale power market • Municipal “Champion” • Iowa – Waverly Light & Power • Need project to demonstrate overall value to the community • Questions?