Oct. 11--LAMAR -- The power plant in Lamar, searching for ways to hold down customer costs, continues to move ahead with its planned switch to coal as part of an overall $66 million plant expansion.

Currently fueled by gas and diesel, the Lamar plant, owned by the Arkansas River Power Authority, feeds electricity to Lamar, Holly, Springfield, La Junta, Las Animas, Trinidad and Raton, N.M.

The expansion planning remains in the final planning stages with the next update expected in December, according to Jim Henderson, general manager of Arkansas River Power Authority.

"It is extremely important for the economic well-being of our member cities, not only for the immediate future, but for decades to come." Henderson said of the project.

"It is very important that we are able to acquire affordable and stable electricity for our members. The proposed plant can accomplish this."

The project coincides with gas costs in the region doubling in five years, Henderson said.

The expanded plant -- to about 38.6 megawatts from the current 25 megawatts -- will use primarily coal rather than the current gas and diesel.

That proposal surfaced after the February 2003 spike in natural gas prices nationwide.

Later in 2003, the Power Authority and Lamar Utilities Board realized that the price increase was permanent and that prices could also continue to climb higher, Henderson said.

"That's what promoted us to look into first converting the plant to a coal-fired plant and later to repowering the plant with coal as opposed to natural gas," Henderson said.

"Coal has become a very affordable resource because we probably have a 250-year supply of coal in this country. There is a greater demand for natural gas than there is a supply, so to ration the natural gas, prices have gone up," Henderson said.

The current plant at 100 North Second Street was built in 1972.

The proposed Lamar repowering project is a required part of Power Authority's long-term plan in order to stabilize wholesale electric costs to Power Authority's municipal members.

Henderson said that the purpose of the project is to supply the electricity needs of Power Authority's municipal members including the towns of Lamar, Holly, Springfield, La Junta, Las Animas, Trinidad and Raton, N.M.

"This is not a merchant plant for selling power to the highest bidder. Any lower rates achieved by the construction of this project will be passed on the Power Authority's members, and hence will be enjoyed by the residents of the Power Authority member communities," Henderson said.

The power generated by the plant will connect to the Tri-State's transmission system to deliver the power to the other Power Authority members.

Although the project is a significant undertaking for a small entity such as Power Authority, it is a small project for the energy industry, where plants typically are more than 15 times the size of the Lamar project.

The downside for coal-fired plants is that they are a major source of carbon dioxide emissions

Henderson said that the proposed new-look plant, which is the largest project that Power Authority has undertaken, will be equipped with a high degree of emission control to ensure that the facility does not violate air quality standards or adversely impact air quality related values.

Henderson said that a new coal-fired fluidized bed boiler will be installed at the facility. The boiler will be equipped with a fabric filter for particulate control. Sulfur dioxide emissions will be controlled by limestone injection. Nitrogen oxides and carbon monoxide emissions will be limited by combustion control.

Henderson said that steam from the boiler will be utilized in both the existing steam turbine and a new condensing steam turbine to produce approximately 44 gross megawatts of electricity.

Coal for the new boiler will be delivered by a train to the Lamar rail yard located directly south of the new Lamar Power Plant property.

Upon arrival at the Lamar rail yard, the unit train will be placed on rail sidings. Rail cars will be moved to and from the sidings to the unloading facility along a railroad spur using a switching locomotive owned by Power Authority.

The Power Authority will own and construct the plant, but Lamar Light and Power will operate it.

Henderson said that the project may cost a little more than $66 million because steel, concrete and diesel fuel prices have gone up following the Gulf Coast hurricanes.

"It may go a little bit north of that number -- we are to get a more definitive estimate the week of Dec. 5, but right now the amount of money set aside for the construction of this plant is $66 million," Henderson said.

Henderson said that the proposed expansion and conversion will be paid for through tax exempt bonds. "We already have the permission from the cities to issue up to $66 million in tax exempt bonds," Henderson said.

In 1979 the Power Authority became a political subdivision of the state which allows the organization to issue tax exempt bonds.