Lease/purchase financing approved by the Board of Public Utilities in Springfield will help meet the area’s future power needs.
The $280 million in financing will be used to fund power supply projects that are necessary for additional electric generation capacity, according to City Utilities in a news release.
CU officials said payments are expected to be covered through the use of existing funds and future rate adjustments.
As part of the effort to ensure Springfield’s energy reliability for the future, the board, in September, approved the installation of three natural gas combustion turbine units. Those added 150 megawatts of capacity and a total of 36-megawatts in utility scale zinc battery energy storage systems to store excess electricity for peak demand periods.
Any rate adjustments that are needed to support payments would require separate approval by the Board of Public Utilities and Springfield City Council. Rate adjustments would be phased in over two years with an estimated 3% adjustment in the first year, likely in 2027.
The need for these projects was accelerated by new planning reserve margins required by Southwest Power Pool (SPP), according to CU. A planning reserve margin is the power capacity required beyond projected demand to ensure reliability during peak usage or unexpected outages in the SPP footprint. SPP recently increased the winter planning reserve margin from 15% to 36%.
“As a municipal utility with locally owned generation, these projects will allow us to continue to provide reliable power to Springfield at rates below state and national averages,” said CU President and CEO Dwayne Fulk in the news release. “They are part of our broader strategy to address future power supply needs through affordable, reliable, and innovative solutions.”