By Ted Schnell • BocaJump | Thursday, May 17, 2012
For some it may seem like a dream that is beyond the city’s financial grasp, especially after Elgin started 2012 with layoffs, budget cuts, several new taxes and fees, and continued questions about the economic stability of the region, let alone the nation.
But the idea of turning the Kimball Street dam into an electrical generator has been higher on Elgin’s radar in recent years. A report presented to the City Council in August pointed to hydroelectric power generation at the Kimball Street dam as one step Elgin could take toward achieving its goals of becoming more sustainable.
At several levels, the idea makes sense. Hydroelectric power is a renewable resource without the environmental risks associated with coal-powered and nuclear power plants. The Elgin Sustainability Action Plan points to a hydropower plant at the dam as Goal II of its alternative energy strategy. The action plan, which is an outgrowth of the city’s Sustainability Master Plan, offers steps and goals the city can take to become more self-sufficient.
There are safety advantages of a hydropower plant at the dam as well, according to a draft of an initial study conducted last year by Orenco Hydropower. Construction of a small hydropower plant and its intake would direct a significant portion of the Fox River’s flow through the powerhouse. But enough water would continue to flow over the dam to maintain an aesthetic view of the structure, and upstream water levels would be kept high enough to ensure the city’s water supply intakes could continue to siphon off river water to Elgin’s water treatment plants.
But under most conditions, the change also would reduce the flow over the dam enough to eliminate the turbulence, known as the boil, which is a significant safety hazard at the dam’s base.
The question before city officials now is significant: Financially, does a hydropower project at the dam make sense?
City Manager Sean Stegall said early last week that he believes generating electrical power at the dam is a good idea. “The question is whether the program is feasible,” he said.
Initial cost estimate: $4.4 million
The draft of Orenco Hydropower’s study, which looked at adding a hydroelectric power plant on the eastern end of the dam, pegged the cost at about $4.4 million over two years. Such facilities typically are designed to last 50 years. Orenco projected a $75,000 annual cost for operation and maintenance, including major repairs when needed.
The Orenco study looked at installing a 575-kilowatt turbine in a 20-foot-wide by 75-foot-long building immediately below the dam, with a 40-foot-wide intake structure to the north. The powerhouse could be constructed as an extension of the walking platform that overlooks the river at Pioneer Park, home to the Pioneer Family Memorial sculpture by renowned artist Trygve Rovelstad.
Orenco identified using the power to supply The Centre as the most attractive option. The dam would generate more power in an average year than The Centre would use, and the city would be credited by ComEd for that extra power under a system called net metering. The study notes that reductions in The Centre’s power costs would be greater than any revenues the city could expect from selling the hydropower. Also, under net metering, the city potentially could see additional revenue from selling renewable energy credits as a result of the project.
Orenco also concluded that while The Centre’s electrical costs were expected to drop this spring due to falling wholesale electrical prices in the region, the long-term forecast is that electricity prices will increase significantly. Yet the cost of generating that hydroelectric power would remain steady.
Viability tied to natural gas
Stegall said the financial viability of the dam project rides on the price of natural gas, whose use in electrical generation is growing. In 2011, a little more than 30 percent of the nation’s natural gas was used to generate electricity. Only industrial use, totaling about 34 percent, was greater.
A study of U.S. electrical generation in 2009 found that 23.4 percent of the nation’s electricity was generated by natural gas, and the U.S. Energy Information Administration expects that to grow. The 2009 figure, the most recent available, represented a 7 percent increase over 2008.
By contrast, gas-fired electric generation produced only 16 percent of the nation’s electricity in 2002.
Stegall noted that continued developments in the process called “fracking” hold promise that the nation’s already abundant supplies of natural gas will continue to grow. An increasing supply could help ensure that natural gas prices — and the cost of gas-generated electricity —remain low.
“Hydropower is cost-effective when (the natural gas) price is low,” Stegall said.
Project still in early phases
So there are signs that favor a Kimball Street dam hydropower project, but the decision has yet to be made, and the process will be complicated, Stegall said.
For one, he said, the City Council must decide whether the project makes sense financially — part of that means deciding how long members are willing to wait for that investment to pay off. Stegall said the city’s costs for the project might be recouped over the course of 30 years of savings in electrical costs, and the council at some point will have to decide whether that is acceptable.
“The city remains in the early stages of assessing the project’s feasibility and is gearing up to conduct a more” thorough analysis, Stegall said. Hiring a consultant to conduct that analysis will carry a cost the City Council will have to consider.
Beyond that, there remain other points at which the project could advance or halt, Stegall said. There are regulatory hurdles — a significant one is an application to the Federal Energy Regulatory Commission, a process that lasts three to four years.
There are other regulatory and environmental issues to consider as well.
The city is gearing up to begin construction next month of the Riverside Drive Promenade, a project whose $10 million price tag is more than twice that of the hydropower project.Yet the regulatory and environmental issues are far greater with the dam project, Stegall said. City officials, he added, already have met with Illinois Department of Natural Resources and Illinois Environmental Protection Agency representatives to discuss the hydroelectric project.