Traverse City Record-Eagle

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May 22, 2014

Proposed partnership 'unfavorable in almost all respects'

TRAVERSE CITY — Traverse City Light & Power officials pulled the plug on a proposal to generate power on Northwestern Michigan College's Main Campus.

The proposed partnership between the city-owned utility and the community college called for officials to outfit the Main Campus powerhouse with a system that would generate electricity through a natural gas-fired turbine, while the excess heat from that system would create the steam used to heat NMC's facilities.

Such a "co-generation unit" would provide electricity for the utility's electrical grid, and TCL&P officials recently commissioned two studies -- at a total cost of about $30,000 -- to explore if the project benefits outweighed its costs.

"When the study came back, it did turn out that it’s not cost-effective for either the college or Traverse City Light & Power to invest money into the plan," utility Executive Director Tim Arends said.

Arends called one of the study's findings "unfavorable in almost all respects" for TCL&P in a Feb. 6 letter to NMC Vice President of Finance and Administration Vicki Cook.

The letter states the project would cost about $2.7 million and "would produce very little benefit to the utility for its investment."

Cook said discussions about the possible partnership began after a devastating snowstorm in March 2012 left thousands without power for days -- including students who lived in the college’s residence halls. The storm prompted NMC officials to explore emergency backup power options.

"That began the conversation, and also we realized it is a big portion of our budget, approximately $500,000 (annually) for electricity,” Cook said. “Would it make sense for us to generate our own power, and would we be able to control some of our costs?”

NMC Trustee Cheryl Gore Follette during a board meeting Monday asked if college officials were exploring similar partnerships with other utilities, like Cherryland Electric Cooperative.

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