Top 10 stories of 2014 - No. 8: Brainerd buys hydro dam
In June, the city of Brainerd became the owner of a hydro dam, formerly operated by Wausau Paper. In a process that some residents argued was too secretive, the council voted to buy the dam, with council member Mary Koep being the sole voice agai...
In June, the city of Brainerd became the owner of a hydro dam, formerly operated by Wausau Paper.
In a process that some residents argued was too secretive, the council voted to buy the dam, with council member Mary Koep being the sole voice against it along the way.
The purchase price was $2.6 million, a reduction from the original price of $4.115 million. It included 37 acres of land and a dam substation.
The dam purchase, as well as the major upgrade projects, were funded through local bonding.
Five engineer reports that were completed as part of the due diligence process have not been released as public information, as city officials say they are confidential because of Federal Energy Regulatory Commission (FERC) regulations.
A few residents have spoken out against that, wanting to see the reports.
The hydro dam purchase came with needed repairs, including a $1.5 million spillway apron, as well as total generation equipment improvements at the cost of $600,000.
Also needed: Water and sewer connections to the site, which could cost about $330,000 and automation improvements could cost $100,000 to $200,000.
The upgrades would allow the machines to run semi-automatically, therefore reducing staff levels from the current 24-hour-a-day operation to staffing just a single shift.
The dam will generate just under 10 percent of Brainerd's power on a normal day, BPU officials say.
Brainerd residents won't notice a big dip on their electric bill. Instead, it could help keep future rates more level or smaller.
Another benefit, officials say, is that it's cheaper for the city to generate its own power. Before the hydro dam, the city bought all of its energy from Minnesota Power.
Between maintenance, yearly inspection costs, insurance, wage costs and utilities, the annual cost to operate the hydro dam will range from $600,000-$700,000.
The costs that are avoided are what offsets operation costs, said Todd Wicklund, BPU finance director, in a previous interview. The city is expected to save $1 million that would have gone to buying energy from Minnesota Power, he said.
It's a $250,000-$300,000 net benefit a year, Wicklund said.