City Utilities to invest almost $300 million in expanding power generation, storage
City Utilities is looking to expand its electric generation and battery storage by moving forward with financing up to $280 million for two projects.
To expand power generation, CU is looking to install three 50 megawatt gas turbines at the McCartney Generating Station. This part of the project is estimated to cost $210 million, according to a CU news release. Once online, which is expected to be in February 2027, these turbines will be the utility’s most efficient generators and will run on natural gas with a fuel oil backup for emergency events.
The battery storage project is estimated to cost $75 million, though this price tag will be reduced with cost share provisions through the Inflation Reduction Act. This project will add 36 megawatts of battery storage within the CU system. The batteries, expected to be in service by October 2026, are based on domestically sourced zinc technology, are non-flammable and fully recyclable.
Quickly responding to changing requirements
The initial funding for these projects will come from the operating capital funds with reimbursement through various financing alternatives, according to the release. In the most recently approved budget, which goes into effect Tuesday, $200 million is set aside for power generation projects.
CU’s Media Relations Manager Joel Alexander said via email the project will primarily be funded through debt financing expected at the start the first half of 2025. Debt service will be primarily funded through future rate increases he said.
These investments come in order for CU to meet new requirements for power generation capacity. Because of increasing electrical demand, aging infrastructure and extreme weather, the Planning Reserve Margin (PRM) the utility is required to meet has increased. PRM is the amount of excess power generation capacity above what is needed to meet the system’s electric load to safeguard against unforeseen disruptions. By 2026, CU will need to maintain a 36% PRM during winter months — more than double the current 15% — as set by the Southwest Power Pool, a regional transmission organization mandated by the Federal Energy Regulatory Commission.
More: City Utilities starts on pipe renewal made possible with $10 million in federal funds
Alexander said via email these projects will be sufficient to meet the new PRM requirements. CU is also currently working on an Integrated Resource Plan to determine long-term resource needs past 2030, which he said will be ready for public input early next year.
Marta Mieze covers local government at the News-Leader. Have feedback, tips or story ideas? Contact her at mmieze@news-leader.com.
This article originally appeared on Springfield News-Leader: Springfield City Utilities to invest $280M to expand power generation