Jackson saves $500,000 in deal with AT&T for generators

Thursday, January 13, 2005

AT&T's loss is Jackson's gain.

Jackson city officials tracked down three never-used electric generators in Seattle, Wash., last week and Don Schuette, the director of electric utilities, says the city will save roughly $500,000 while getting more back-up power than expected.

Last year, Schuette said the city sought bids on generators to get an idea of how much the city should set aside for the 2005 budget. The lowest bid for two generators that would provide 4 megawatts of power was $1.7 million.

The city, confident it could find a better deal, budgeted $1.5 million from the electric surplus fund to replace a couple of generators this year.

The generators will be used when the city's main supplier, Ameren UE, goes down. The city can also use the generators as negotiating chips when the city and the electric supplier hammer out energy contracts.

The three new units to be purchased from AT&T will provide 6 megawatts of power and cost $1 million, which is $500,000 less than budgeted and $700,000 less than the lowest bid last year.

"We knew there were some possibilities out there and almost immediately after seeing our budget these became available," city administrator Jim Roach said. Roach said the city of Chillicothe, Mo., recently got a good deal on generators as well.

Although the units have never been used, they aren't new. Schuette, who discovered the units through a broker, said the Caterpillar generators were originally bought by AT&T. Schuette said the telephone company had anticipated an expansion that never happened and the company was forced to sell the equipment.

The units are 45 feet long, 12 feet wide and almost 13 feet tall. Each unit weighs 77,000 lbs. and will have to be transported across the country.

Moving quickly

At such a cheap price, the city had to move quickly. Schuette and city alderman David Reiminger, who is chairman of the power and light committee, made a spur-of-the-moment trip to Seattle last Wednesday to inspect the equipment.

The board gave its informal blessing to proceed at Monday night's study session.

"It's always good to return $500,000 to the electric surplus fund," Schuette said.

Unlike the current permanent generators at Jackson's plant, the generators are portable units, cased in what looks like a trailer. They could be placed at strategic locations throughout the city, but the city hasn't made any decisions about where to put the units.

Schuette expects the generators to be delivered some time within the next two months.

Roach said the city has no immediate plans to spend the savings.

With the new units, the city will have a total of 24 megawatts of power available for backup. The city has a peak load of about 37 megawatts.



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