Photo by Deb Gau The 1968 generator near the Marshall Municipal Utilities office is currently undergoing maintenance to replace a diesel starter motor. The generator is currently used only in emergency backup or reserve capacity situations, said Scott Mellenthin, purchasing and property coordinator at MMU. A new agreement with MMU’s electrical provider will allow the utility to plan ahead for the generator’s eventual replacement.

MARSHALL — The generator outside Marshall Municipal Utilities has an important role as a reserve source of electrical power. But the generator is also more than 50 years old, and MMU needs to look at future plans for replacing it, said MMU General Manager Dave Schelkoph.

A new agreement with MMU’s electrical provider would help make it possible to replace the generator without impacting rates for Marshall electrical customers, Schelkoph told Marshall City Council members Tuesday.

“We’re looking at the future and how to replace that. This contract gives us a financial tool to do that,” Schelkoph said.

Council members voted to approve the new reserve capacity agreement between MMU and Missouri River Energy Services (MRES). Schelkoph said the agreement both increases the rate MRES pays MMU for making the reserve generator available by about 250%, and provides an incentive payment to build new generators.

Schelkoph explained more about the agreement during Tuesday’s council meeting. MRES, one of MMU’s suppliers of electrical power, includes members across Minnesota, Iowa and the Dakotas.

“They need to have reserve capacity, reserve generation, for their members,” Schelkoph said. MMU’s generator in Marshall is available to MRES as part of that reserve capacity.

“MMU has a combustion turbine that produces about 15.5 megawatts of power,” Schelkoph said. The generator, which dates back to 1968, runs about once every quarter, he said.

Scott Mellenthin, purchasing and property coordinator at MMU, said this week that the turbine is in good shape. However, the generator is currently undergoing maintenance to replace a diesel starter motor with a new hydraulic system, he said.

Schelkoph told council members that MRES has been looking at ways to best meet the needs of members like MMU into the future. He said MRES wanted to encourage members to develop more reserve capacity. The new agreement with MMU would increase the monthly rates MRES pays for reserve capacity.

“They’ve increased the return on that for MMU here in Marshall about 250%, from $2 per kW (kilowatt) to $5 per kW,” Schelkoph said. “That’s an incredible increase in compensation for having a generator.”

Schelkoph said the rate increase would help MMU maintain and operate its existing generator.

“But there’s also another caveat to this particular contract. It’s an important one, in that they are encouraging their members to build new generation — which we need to do. Our generator is 54 years old, and we need to build new generation. So they’re going to encourage that building of a new generation plant by adding a kicker of $2 per kW per month, for 10 years, as upfront monies,” Schelkoph said.

The additional incentive would have an impact of over $3.5 million that would help MMU replace its existing generator and build new generation, he said.

Schelkoph said MMU is considering building diesel-powered reciprocating engines to replace the current generator, but that project is not happening just yet.

On Thursday, Schelkoph said MMU still plans to get more years of service out of its current generator.

Council members voted unanimously to approve the new reserve capacity agreement with MRES.