City of Lehi Lowers Energy Costs with Peak Shaving

POWER NEED

Located on the edge of Salt Lake and Utah counties at the north end of Utah Lake, Lehi sits at the nexus of technology firms migrating from California. The region encompasses a development, and hardware manufacturing and research firms along the Wasatch Front.

With companies such as Adobe, Microsoft, and Xactware putting down roots within its service territory—and with a 134 percent increase in population since 2000—Lehi City Power realized it was time to replace its outdated facility with a new campus to keep pace with the explosive growth.

In 2011, city officials began a four-year planning process that ultimately led to the selection of Cat dealer Wheeler Machinery to serve as general contractor for a $17.5 million campus, which includes the main office, warehouse, shop, and a new distributed energy facility used for peak shaving to reduce the sometimes high cost of power from the energy grid.

Wheeler has a track record of developing distributed energy systems for municipal utilities in Utah, including Heber City, Springville, Provo, and Hurricane. A unique approach developed by Ken Green, now retired from Wheeler Power Systems, involves the Cat® dealer overseeing all facets of power systems installations. This gives the end user one point of contact during the development phase and an experienced electric power dealer to fall back on for product support once the project is completed.

Before coming to Lehi City Power to serve as director, Joel Eves worked for Provo City Power, a nearby municipal utility that commissioned its own new power plant in 2017 with five Cat G3520H gas generator sets.

“I know those people really well, and if I have a problem or I need something, I can call them and they’ll help me out and vice versa,” Eves says. “The fact that they have the same Cat gensets as we do—I know the exacting detail they would have gone through to make that selection. It gave us some comfort when we made the recommendation to our decision makers to go with Wheeler and Caterpillar for our new generation plant.”

SOLUTION

Located behind the new 17,000 square-foot office of Lehi City Power, the Broadbent Generation Facility first opened in March 2018. It has three Cat G3520H generator sets that produce 7.2 MW of power during times of peak demand, when energy prices are high. This typically occurs during the summer months. Peak demand reached 120 megawatts this summer in Lehi.

“At the rate we’re growing, we wanted a way to help us address the power needed for our city,” said Cameron Boyle, assistant city administrator, during a groundbreaking ceremony in 2017. “This helps offset the cost of power we’re purchasing from other sources, and during our peak times, in July and August when everyone is using their air conditioners, we want to have our own ability to generate power to offset the need.”

Lehi belongs to Utah Associated Municipal Power Systems (UAMPS), which provides wholesale electric energy, transmission, and other energy services to community-owned power systems throughout the Intermountain West.

As a member of UAMPS, Lehi City can contract with energy providers of its choosing. Some of those energy sources include hydro power, natural gas, and renewables such as wind and solar.

Eves says having the ability to beat the cost of grid power with a local distributed energy system is critical to the future of municipal power systems.

“From all the indicators I’m seeing and all the conferences I’m attending, there’s going to be a huge need for a product like this that is load following, can ramp quickly, and come offline quickly,” Eves says. “And that’s because of all of the renewables and intermittent production that are taking place, which lead to greater fluctuations throughout the energy grid.”

RESULTS

Lehi has a specialist who monitors the energy market. When forecasts indicate that prices are about to spike, Lehi City Power notifies UAMPS that it plans to run the generator sets based on the strike price—which is when the cost of natural gas is cheaper than power rates on the spot market.

“So, for example, when prices reach $100 per megawatt hour, if I can start these generators at $40, $35 per megawatt hour, we save all that money,” says Crystal Robinson, forecast and resources manager for Lehi City Power.

Including all operating and maintenance expenses, it costs Lehi $50.73 per megawatt to operate the facility. Current costs to purchase energy from the grid can vary anywhere from $20 to $300 per megawatt hour, depending on demand.

“Having our own source of power generation is a hedge, because if we don’t have it then we know we’re just stuck to the market,” Robinson says. “If the market price is high, then we have another option.”

The Utah Valley is prone to an inversion that traps pollutants and leads to a visible haze, particularly in the winter months. Much like the new Cat power plant in nearby Provo, Lehi is now one of the cleanest running plants in Utah, Eves says.

The Cat G3520H genset meets most worldwide emissions standards down to 0.5 grams per brake horsepower-hour. To further reduce nitrogen oxide emissions, Lehi City Power utilizes a Selective Catalytic Reduction system.

“You have to understand the area we’re in to appreciate what that means because we’re in a very poor air quality area—especially in the winter when the inversion locks everything in, Eves says. “So, to have the Utah Department of Air Quality say we’re clean enough to run 24/7 365 for our whole plant is amazing.”

Based on peak demand, the new generation facility can generate approximately 10 percent of the energy needs for Lehi’s 20,000 power customers. The facility has room to expand, and could eventually accommodate three more G3520H gensets, plus two more 4 MW units.

“As fast as we’re growing, we knew we needed a whole new facility,” Eves says. “So, we knew we had to build up and make the generation facility more than we need today. As we move forward and gain more experience running the plant, market forces will dictate our next move.

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