The future of the City of Cove’s hydroelectric plant is no longer in jeopardy.

Oregon Trail Electric Cooperative officials and the City of Cove have reached an agreement on a new contract through which the cooperative will continue purchasing power from the city’s Mill Creek Hydroelectric Plant on an interim basis through Oct. 30.

“OTEC has agreed to continue to purchase power from the City of Cove for an additional four months until transmission access will be available from the Bonneville Power Administration so the city’s power can be re-marketed to the Avista Corporation,” said Anthony Bailey, OTEC’s chief financial
officer.

The four-month contract takes effect July 1, immediately after the current one expires. The agreement puts the City of Cove in a position to later enter into a long-term agreement with Avista Utilities and the Bonneville Power Administration for the sale and transmission of its power.

“(The four-month contract) will allow our hydro plant to continue operating for a number of years,” said Cove City Councilor Regina Kruse.

OTEC has been purchasing power from the City of Cove since July 1, 2016, after the city’s contract with Idaho Power expired June 30, 2016.

The City of Cove receives, on average, $5,292 per month from OTEC for the sale of its power, Kruse said. She said terms of the new four-month contract call for the city to continue receiving a comparable amount from OTEC. Much of the money Cove is paid by OTEC for power is used to cover operating expenses, Kruse said, and a portion helps cover city expenses including insurance, employee wages and benefits.

The City of Cove began selling its power to OTEC while it searched for a long-term buyer and transmission service for the power generated by the Mill Creek Hydroelectric Plant. OTEC agreed to purchase the output from the Cove hydroelectric plant while the city looked for a long-term buyer. Over the past year, the City of Cove has negotiated with several entities, including Idaho Power and Portland General Electric before striking a deal with Avista for the power and BPA for the transmission service.

The only speed bump in the arrangement is that BPA needs time to make changes in its transmission system before it can send power from Cove’s hydro plant to Avista. The four-month contract negotiated between OTEC and Cove will provide BPA the time it needs to make these changes, Kruse said.

The City of Cove had the option of shutting down the hydro plant on July 1 when its current contract expires, then starting it up again after BPA made its transmission system changes, Kruse said. She explained that the cost of doing that is very high in part because of complex federal regulations.

“We can’t afford the cost of shutting down (the hydro plant) and then getting it re-certified (so that it can operate again),” Kruse said.

See complete story in Wednesday's Observer

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