KMR and MU to Explore Electricity Options

At a July 2nd KMPUD hearing, the community had an opportunity to express their opinions about the future of the electricity business in Kirkwood. The KMPUD presented the results of their recent consultant survey regarding electricity generation options that ranged from bifurcating the residential electricity market between KMR and residential use to connecting to the national power grid. An engaging and lively discussion ensued with points made from nearly every angle. There was clearly broad support for the concept of setting a goal to connect to the grid. That said, there is significant debate about how best to reach this goal.

David Likins, President of Mountainsprings Kirkwood, owner of MU, commented, “We may have some issues with the (consultant’s) study itself, but we clearly agree with the idea of sitting down with the KMPUD to explore how a business relationship might lead to lower electricity costs and service improvements…we have spent the better part of the past year building a team with the capability to tackle the challenge, but we understand that this might be something better suited for a municipal agency…we are prepared to look at all the options that might lead to a win-win for everyone on the residential electricity issue. Certainly a connection to the grid would be fantastic and we will need public support to get there.”

For its part, Mountain Utilities has been busy preparing for the upcoming year with an eye on improving its efficiency to counteract the rising cost of diesel fuel and utility rates in California. John Jensen, MU President, commented, “We have recently completed the purchase of a new C32 Caterpillar engine that will complement the new C36 we purchased last year. We expect to run nearly 90+% of our load through these two engines which will significantly increase our efficiency while improving our reliability as these engines were made to work together. We should have both up and running in October with plenty of time to work out the operating bugs that plagued us last December. These are exciting generation upgrades for the plant.”

KMR anticipates that the KMPUD will want to take the next step in exploring the options and that the agency and the company will sit down in the late summer and early fall to evaluate the opportunities.

Community Discusses Electrical and Propane Issues
Standing Room Only!

There have been numerous discussions over the years as to why Kirkwood’s electrical rates are so high, why is the private resort company providing electric service to the community instead of the local public agency (KMPUD), and why don’t we attempt to bring in less expensive power from outside the valley? All good questions.

As most people already know, none of the big electrical providers in California provide power to Kirkwood because there are no power transmission lines that extend all the way to Kirkwood. Put another way, Kirkwood is not on the California power grid so we are required to generate our own electricity. The current electricity and propane provider within Kirkwood is Mountain Utilities (MU) which is owned by Kirkwood Mountain Resort. Electrical rates in the valley are currently hovering around $.60 per kilowatt-hour. The rest of California averages around $.11 per kilowatt-hour. Now you have the background.

In February of 2006, KMPUD sent out a questionnaire to all property owners in Kirkwood and included a question regarding whether KMPUD should take on new services. Over 85% of the respondents stated that KMPUD should consider taking over additional services including electricity and propane. Based on this information, KMPUD hired a consultant to perform an Electrical Feasibility Study (Study) to determine who should provide power to the community, what type of power should be generated, and what would be the projected cost to local customers. The Study concluded that KMPUD has legal authority to provide this service and that if KMPUD purchased MU and provided power to the community, costs could be somewhat lowered. The Study also recommended that KMPUD pursue a long-term goal of bringing in outside power.

On July 2, 2006, KMPUD presented this information to the community. Needless to say, we exceeded the maximum occupancy of the meeting room (over 100 attended) and it was great to receive input from the homeowners who are most affected. The response from those in attendance was almost unanimous in their opinion that KMPUD should take over electricity and propane service within the valley first and pursue the long-term goal of bringing in outside power.

The KMPUD Board will be discussing this issue over the next several months and your input is important. A first step will most likely include an independent appraisal of MU’s infrastructure and assets to determine a starting point for the potential sale of MU. KMPUD is also exploring the potential to partner with private investment companies to extend an electrical transmission line to Kirkwood. Although the Study concluded that the cost to construct this line would be very expensive, it would actually provide the most cost savings to customers.

Tom Henie has been the General Manager of the Kirkwood Meadows Public Utility District since 1992.