(The following story by Tracy Overstreet appeared on the Grand Island Independent website on November 23.)
GRAND ISLAND, Neb. — It’s expected to cost about $400,000 more to get coal to Grand Island’s Platte Generating Station next year.
That’s because of a new Union Pacific contract with the city to replace the current contract that expires at year end.
“Union Pacific has firmly stated that the current contract will not be renewed,” said Utilities Director Gary Mader.
In its place is a new agreement, called a “circular,” that allows the railroad to be paid its delivery fee plus get increases based on rises in diesel fuel prices.
There were two options presented to the city.
Option 1 is for one year and would cost an additional $548,000 for coal, plus about $300,000 extra for the fuel adder. Mader is recommending against Option 1.
Option 2 is a three-year agreement that would cost the city $140,000 more for coal in 2005, $250,000 more in 2006 and $365,500 more in 2007. The diesel fuel adder would add another 300,000 of expense each year.
On a per-ton basis, Mader said, Option 1 costs $9.62 per ton. Option 2 has a per-ton cost of $8.66, $8.92 and $9.19, respectively, for the three years.
“The one-year option is priced substantially above the highest of the three-year prices,” said Mader, who recommended Option 2.
The city’s coal-fired power plan is only served by one rail line owned by the Union Pacific.
The Grand Island City Council is to take action on Mader’s recommendation during a 7 p.m. city council meeting Tuesday at Grand Island City Hall, 100 E. First.