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Tentative approval granted for plant

May 29, 2002|by STACEY DANZUSO

chambersburg@herald-mail.com

The Chambersburg Borough Council gave conditional approval Tuesday to construction of a $17.3 million power plant aimed at keeping electricity prices stable.

Council members awarded the contract to design and build the 20- to 25-megawatt facility to Wartsila, which proposed four reciprocating engines in the plant.

The contract is only conditional. The borough has until Aug. 7 to ensure it can line up financing and a power supply contract that would provide significant savings to justify the cost of building the facility, Borough Manager Eric Oyer said.

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Five power supply companies have about two weeks to submit their final estimates for a five-year contract to the borough's consultants, Downes and Associates, which will determine which one offers the best deal.

The goal of building the facility is to keep rates low for borough customers and to improve reliability. The facility will guard against the price spikes West Coast residents saw in the last couple of years, according to consultants George Owens and Alexander Grier.

Downes and Associates began studying last year whether the borough should add to its 7.5-megawatt generation capacity as it considers a new wholesale electrical supply contract. The borough currently buys its electricity from Allegheny Power Systems, but that contract ends Nov. 30.

The consultants are weighing variable running times for the generators, gas costs and other factors in considering a new power supply contract.

The consultants recommended the council approve the conditional contract, which it did Tuesday on a vote of 8-1. Only Councilman Scott Thomas opposed it; he did not say why.

Owens said it is necessary to continue to add generation to prevent the skyrocketing costs and shortages California faced a year ago.

"It would be a good idea for the borough to add its own generation to guard against high costs and instability," he said.

As long as the borough gives the project final approval by August, the new power plant could be running by June 2003.

The borough's current electrical generation capacity covers the need during peak times, such as hot summer days. The proposed 20- to 25-megawatt station would cover the variable usage on any given day, allowing the borough to enter into a wholesale power agreement to purchase just its basic power load, which is very low risk, Grier said.

Richard Hamsher, the borough's electric superintendent, said building the facility is only prudent when packaged with a power supplier.

"If (the plant) is only to supply to our customers, it doesn't make sense," because the borough alone could not offer as competitive electricity rates, he said.

The consultants also suggested a potential site for a power plant.

They said a tract in the Chambers-5 Business Park along the railroad tracks between Sheffler and Nitterhouse drives would be the best place because of its access to all utilities.

The contract with Wartsila does not cover the cost of buying land or extending the gas line to the facility.

Borough officials would seek a municipal bond to pay for the facility.

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