COLUMBIA — Columbia's energy portfolio began a big shift this week.
The city ended its contract with Ameren Energy Marketing on Tuesday and took full ownership of the Columbia Energy Center on Wednesday.
“We are in transition mode,” said Jim Windsor, manager of rates and fiscal planning for the Columbia Water and Light Department.
The contract with Ameren Energy Marketing, which has power plants in Illinois, supplied more than 50 percent of Columbia's electricity last year, Windsor said.
The city has contracted to buy power from Iatan 2, a coal-fired plant in Weston that came on line Jan. 1. The city also has contracted with Prairie State Energy Campus in Washington County, Ill., which has one coal-fired generator set to open in December 2011 and another in August 2012. Prairie State eventually will generate about 26 percent of Columbia’s energy, Windsor said.
The new portfolio still has Columbia getting the vast majority — perhaps 90 percent or even more — of its electricity from coal. Windsor said coal is the cheapest source of power in Missouri.
Dick Parker, member of the Environment and Energy Commission and the Water and Light Advisory Board, said he pushes hard for renewable energy but realizes coal is a cheap way to produce enough energy.
"Wind and solar power depend on the intermittence of the sun shining and the wind blowing," Parker said. "We're not yet in a position to bypass coal as a major source of our power."
Until the new power plants are fully on line, the city will need to buy more energy off the market, Windsor said.
On Wednesday, the city took full ownership of Columbia Energy Center, a move that's expected to save $1 million annually. The center primarily will supply electricity during high-use periods and emergencies, said Connie Kacprowicz, utility services specialist with Water and Light.
The Columbia Energy Center is a 144-megawatt electric generation facility powered by natural gas, located in Columbia near the landfill. In April, 86 percent of voters approved Proposition 2, a $49.5 million bond issue to purchase remaining shares of the plant from Ameren Energy Marketing.
Previously, the city owned 25 percent of the plant and paid for half the plant's energy production capacity at a cost of $6 million every year. With full ownership, Water and Light can operate the plant for about $5 million, Windsor said.
“We are required to estimate peak energy and have capacity for 15 percent more than that,” Windsor said. “(The center) serves to help us meet our energy requirements and serves as a cap to market prices, based on natural gas prices.”
According to Water and Light’s 2011 Renewable Energy Report, Columbia used more than 1.185 million megawatt hours in 2010. The energy center gives the city the capacity to produce 108 more megawatts, Windsor said.
If market prices for electricity rise higher than the combined cost of natural gas and operation of the energy center, the city can choose to use the facility to generate cheaper electricity. It also can choose to sell the electricity in the market to make a profit, Windsor said.
Purchasing the plant makes the whole system more reliable because it is within the city’s grid and can back up renewable energy sources, which are more intermittent, Kacprowicz said.
A ballot passed in 2004 required the city to purchase increasing amounts of renewable energy without exceeding a 3 percent rate increase as a result. The city’s sales of electricity from renewable sources must be at least 5 percent by 2012, 10 percent by 2017 and 15 percent by 2022. This is different from the state requirement that investor-owned utilities use 15 percent renewable energy by 2021.
Some of the approved sources of renewable energy are wind, solar, hydropower, geothermal and biomass, which includes landfill gas, paper-based products and wood, according to the renewable energy report.
The city receives most of its renewable energy from wind and biogas facilities. The Columbia Power Plant burns 10 percent waste wood from a barrel production plant in Lebanon, according to the report.
The city also is negotiating another wind contract, but Windsor said he could give no more details at this time.
In December, the Columbia City Council signed a solar energy lease agreement with the Free Power Company, which would supply, install and maintain equipment if the city provides the land. Currently, solar projects provide only a negligible amount of the city's overall energy, Windsor said.
Kacprowicz said solar energy is promising because it produces the most during the summer, when energy demand is high.
“We’re looking and will continue looking for renewable energy resources to stay ahead of the renewable goal,” Kacprowicz said.
Windsor said the city gets about 5 percent of its energy from renewable sources now, which puts it slightly ahead of the pace required by the 2004 ballot issue.