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Palo Alto Online

Publication Date: Wednesday, April 11, 2001

Palo Alto hopes to buy $3.5 million generator Palo Alto hopes to buy $3.5 million generator (April 11, 2001)

Extra power an insurance policy for rolling blackouts

by Marv Snow

The purchase of a 5-megawatt natural-gas generator may keep the home lights burning in Palo Alto when blackouts threaten this summer. Business lights and computers, too.

The Utilities Advisory Committee (UAC) gave Utilities Department officials the green light last Wednesday to present a proposal to purchase a $3.5 million, 5-megawatt generator -- targeted to be online by Aug. 1 -- to the City Council.

The Utilities Department also wants to rent three 1.7-megawatt diesel generators from June to August (at a cost of $650,000) until the 5-megawatt generator is up and running at the Municipal Service Center.

Kirk Miller of the Utilities Department's Supply Resources Group told the UAC the city has a "need for local generation during Stage 3 blackouts." If the city is ordered to reduce its power-grid usage by between 2 percent and 10 percent, he said the Utilities Department would use the city generator to keep the lights on in every block within the city.

Miller said the generator would provide approximately 2 percent of the city's 200-megawatt load and also reduce the need for customers with diesel generators to use such equipment during power outages.

The cost for renting the three diesel generators ($650,000) when spread out over the entire summer would be $4.38 per residential customer, or $1.10 a month. The cost would be $26.34 a month for small commercial businesses; $775.23 a month for medium commercial businesses; and $5,701 a month for large commercial customers.

"The cost to the residential customer is very small for the reliability (it provides)," Miller said.

"When you break it down by customers, it's quite small," Utilities Director John Ulrich said.

The generators would be located at the Municipal Service Center, on East Bayshore Frontage Road between Embarcadero and San Antonio roads, because, "You wouldn't want one in a neighborhood," Miller said. Other reasons for locating it at the service center include its proximity to a PG&E high-pressure gas line, the presence of a 12 kilovolt feeder line on the property, and for proper security, he added.

Miller said the city would have to grant sole-source authorization to contract with Planergy International, a firm that would provide engineering, procurement and construction services for both the interim and permanent generators.

After renting the diesel generators for three months, Miller said the city could choose to enter into a five-year lease for the gas generator at $60,000 a month or purchase it for approximately $3.5 million.

The city would have to secure a permit from the Bay Area Air Quality Management District to operate the generator. Miller said Planergy may need four to six weeks to obtain a permit, but there is "a good chance" the permit would be granted.

Planergy would provide all maintenance and the generator would only run when the state's Independent System Operator (ISO) calls for power cutbacks. "The unit will not be run for economic reasons," Miller said.

"A good way is to view it as an insurance policy," UAC Chairman Richard Ferguson said.

Miller said he hopes to have the council adopt the proposal on April 23 and have the diesel generators in operation by June 1.

"It's not easy, but it is doable," he said. "It will not provide enough power to halt rolling blackouts, but it will help." <@$p>

E-mail Marv Snow at


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