The Garden City Commission on Tuesday unanimously approved an ordinance authorizing improvements to the city’s electric distribution system and the general obligation bonds intended to fund them, the most recent step in an ongoing project with Sunflower Power Corp. and Wheatland Electric Cooperative.
The city’s electric department has for months prepared for improvements to some of its substations and expansion of its distribution system.
Currently, Sunflower's system distributes Garden City’s electric power supply to substations owned by Wheatland, which charged the city $535,000 last year to transfer the power to city distribution facilities, said Mike Muirhead, the city’s public utilities director. Restrictions at the Wheatland substations also limit the capacity of power the city can receive.
For years, the city has wanted to connect to Sunflower directly, Muirhead said, a change that would avoid those restrictions and cut out the annual charges to Wheatland.
Instead of building new substations to do so, Garden City entered into a memorandum of understanding with Wheatland Electric to purchase substations from the company that would allow that direct connection to Sunflower, a move that will be possible once the company completes construction on three additional substations for their own use, Muirhead said.
Wheatland’s general counsel, Jim McVay, told the commission that land has been selected and contracts on deck for the construction of the new facilities and they should be completed within the next two years.
“Wheatland looks forward to working with you to get you access to the bulk transmission system. That’s what this really is. And we’re looking forward to getting out of your way and getting on with your getting access to that system,” McVay said.
The approved Tuesday ordinance authorized the issuance of up to $16.65 million in bonds to cover the purchase and other costs to the project. About $11.5 million will go to Wheatland for the substations and $2.5 million to Sunflower and $2 million to the city for other improvements to the electric distribution system, Muirhead said. He said Sunflower plans to work on the city’s south and north substations for their own needs.
Bonds payments will be about $985,000 a year, over half of which will be covered by the funds that would have covered the $535,000 annual charge to Wheatland for the use of their facilities, Muirhead said. The city also expects to pay off other bonds early, minimizing new costs, he said.
“That’s going to be almost a complete wash, as far as costs go,” Muirhead said.
Muirhead said the city is currently working on the asset purchase agreement, which will lay out a firmer timeline for the next steps of the deal.
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