Mich. public power utility taps CHP plant for reliability

When the village of Sebewaing, Michigan temporarily lost power in recent years, local officials began thinking about ways to improve reliability for its 1,100 metered customers along with Michigan Sugar, the largest electricity user in the so-called "sugar beet capital" on Saginaw Bay in the state's Thumb Region.

The solution? A new combined heat and power plant.

Construction has begun on the $8.9 million project in an industrial development area of the community, and by mid-2019 Sebewaing should be reaping the full low-cost power and steam benefits of the 7.7-MW facility.

Melanie McCoy, superintendent of Sebewaing Light & Power, said Thursday that officials knew they had to do something to try to avoid the occasional power outages. The village has a population of 1,700.

"We are tied to a 40-kV line from Detroit Edison. We're actually a radial feed and we have had some momentary outages over the past several years," she said. "When (residential customers) lose our power for 60 seconds, it's a pain in the neck because we have to reset our clocks. But that is more serious and challenging for our largest customer," the sugar beet processing facility.

The village currently is purchasing power under a full-requirements contract with EDF Energy Services LLC that is scheduled to expire in May 2020, with the power delivered over the 40-kV line.

To facilitate its future power needs, Sebewaing also is building a new electric substation "that will be a distribution substation for the rest of the town and Michigan Sugar," she said.

After her local utility shared its ideas with the village council, the decision was made to pursue the CHP project with General Electric's distributed power business and Clarke Energy. They will provide a turnkey CHP plant to the local utility.

The project includes two GE gas engines providing 4.4 MW and 3.3 MW of electricity, respectively. Clarke will provide a customized prefabricated and modular enclosure along with turnkey project management, installation, integration and commissioning.

By self-generating, McCoy said, the town estimates savings at more than $1.4 million annually. In addition, the plant adds to its capacity, allowing it to reliably serve more customers when the Midcontinent Independent System Operator transmission system is constrained or suffers an outage.

McCoy said the average Sebewaing electric customer now pays about 10 cents/kWh and, if anything, the rate will stay the same or be lower with the CHP project.

Sebewaing, which has operated a municipal utility since 1911, is using tax-exempt municipal bonds to pay for the project. The bonds will be retired over a 20-year period.

"It's pretty cool," McCoy said about the project. "They're working on the foundation right now. The foundation should be poured this week. The engines are going to arrive in 23 truckloads at the end of November."

Heat recovered from the project's cooling water circuits, lube oil circuit, intercooler and exhaust gases can provide up to 10.45 million Btu/hour in the form of low-temperature hot water at 224 degrees Fahrenheit. The hot water will be available to Michigan Sugar.

Leon Jansen van Vuuren, GE's general manager of global sales and commercial operations, said distributed natural gas-fueled power generation plants, like the one being built in Sebewaing, provide flexible solutions to generate electricity at a low cost with lower emissions.

"These types of plants also offer total project cycle speed in terms of their ability to go from contract signing to full operation in a year or less," he added.