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Trinidad City Council receives ARPA report, utility shows profits inline with projections

by Bill Knowles
TRINIDAD — Former city council member Carlos Lopez, who is currently a member of the Arkansas River Power Authority (ARPA) board, delivered an update to the Trinidad city council during the regular meeting Tuesday evening.  He told the city council that ARPA was about 1% under budget on expenditures.

That was due mainly to a mild spring as it moved into early summer.  Demand on electrical service was down during that time frame according to Lopez. Sales had been predicted to be 1% under budget with the net gain on income was predicted to be 2.7% less than budget. “But we may see these numbers change if we have a hot and humid July.”

The 2021 year-end cash projection is seen at $4.7 million.  This figure includes expenditures in capital in the LRP contingency monies.  Lopez reported that ARPA has no intention on spending those monies at this point even though the fund can be used for better ratings. The current debt coverage is at 1.3%.

ARPA has $165,000 for capital improvements and contingency, and the ARPA board is expecting to see a decrease in insurance since the Lamar plant was demolished.   Operating costs for ARPA show that they were lower than in 2020 and 2018. In 2019, ARPA received better prices due to better negotiations.

The cost of per mega watt hour of consumption is between $40 to $45 from natural gas and coal fired power plants compared to $28.32 per mega watt hour from wind generated power. Wind generation comprises only about 8% of ARPA’s portfolio. The production costs are lower due mainly to zero fuel costs for wind. “The trend is showing that we are gaining more wind production as we move along,” said Lopez.

Hydropower will also increase in costs over the course of 2022 due to ARPA having too much water and a lack of adequate storage facilities. The excess water has actually increased the costs for the use of hydro.

ARPA is also looking at the use of batteries to store excess power generated from renewables. At this point, the preferred component is lead batteries. This allows for longer storage life and the batteries are cheaper to make versus the costs on lithium batteries. Due to an increase in demand for electric vehicles, the price of lithium continues to increase.

Actions taken by the council
The city council passed the consent agenda with a 7-0 vote. Items in the consent agenda included approval of the regular meeting minutes of July 20, 2021, the appointment of Jay Gillespie to the Corazon de Trinidad Historic Main Street Board, approval of the bills, and the approval of payroll for July 24, 2021 through August 6, 2021.

Also approved in the consent agenda was an Intergovernmental agreement with Las Animas County for the conduct of the November 2, 2021 regular election as a coordinated election and for the conduct of all future coordinated elections.
There was an approval of a modification to entertainment district reporting to allow the Paradox Beer company to attach itself to the district in the consent agenda.

Approved in the miscellaneous business section of the agenda was the purchase of some property for the gas department. This has been discussed several times at work sessions over the past two months.

The department will pay for an environmental study for possible contamination. There had been underground tanks that had been removed and cleared. The city council voiced concern on whose responsibility it would be if something should happen. Council member Erin Ogletree suggested that the responsibility would fall to the previous owner. Funding for the purchase will come out of the utilities funds.
The meeting was adjourned at 6:58 p.m.