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Power company analyzes trends, costs

The City Council, many members of the local utility and several citizens listened as Roy Thilly, president of regional energy supplier Wisconsin Public Power, Inc., delivered a state-of-the-rate report Tuesday night.

Thilly said WPPI typically gives a personal update to each of its member communities every other year. River Falls is a member and shares power on the WPPI grid.

Besides answering questions, Thilly talked about two main topics: Power plants plus current and future rates.

Thilly described the many factors that would probably drive rates upward. He said it is difficult to say exactly how much.

"Rates are cyclical," said Thilly.

Decreased load factors and demand can cause an "uptick" in rates because while it means people are conserving, it creates fewer billing units to which fixed costs can be distributed. He explained pending legislation that will impose costly regulations as well as possibly enact environmentally friendly standards that while good, cost more to achieve.

In partnership with other power companies, WPPI will pay $2.3 million, its share of two new 620 megawatt power plants slated to cost $2.3 million.

Thilly said the process for the near-completed one began in 2001. It should finish soon now that action brought by the Sierra Club against one of its permits has been resolved and some labor issues have been settled.

"The most effective thing you can do (to control rates) is provide conservation and efficiency measures to your customers," said the power-company president. "Elimination of waste is essential going forward."

Thilly said while rates may trend upward in the future, local payers couldn't have gotten a better deal on the new power plants.

He said the partners arranged a fixed contract when construction was brokered, a practice unheard of now. Thilly said the cost to build new plants will increase substantially again in the near future.

"They will be the cleanest coal-fired power plants today," he said about the ones underway. "WPPI's fleet (of plants) is the youngest in the state."

After new regulations aimed at reducing greenhouse gases and CO2 take effect, some of the older "dirtier" plants could be forced to cease operation.

Thilly elaborated about possible renewable options and said just about everything with the potential to generate power -- wind, sun, nuclear, gas and clean coal -- will be discussed and considered. Only hydro-electric is not an option in Wisconsin.

He spoke with pride about how out of all the company's communities, River Falls generates the most power from renewable sources.

WPPI as a whole is already meeting the state's mandate for suppliers to get 10% of their power from renewable sources by 2015.

Thilly said while the bad things "we" did 20 years ago show now, the good things "we're" doing today will show 20 years from now.