Sioux Center Municipal Utilities is taking the next steps toward installing local standby electric generation. The project would build about 12 megawatts of diesel generation near Sioux Center’s north power substation. In an extreme situation in which power supply was cut off to Sioux Center, this standby generation would partially power the town, which has a total peak demand of about 26 megawatts.
“If we were to lose the whole town but we have this generation, there would be something we could do to take care of our citizens,” Sioux Center Electric Department Head Ezra Weikert said. “We would have the ability to do something in a catastrophic event.”
Utilities Manager Murray Hulstein brought the recommendation, stating “Our staff recommendation to install this generation is highly influenced by the nation’s increased reliance on electrifying everything while at the same time taking away dispatchable resources like coal and natural gas.”
The idea of building standby generation has become more favorable as Sioux Center’s power provider, Missouri River Energy Services (MRES), increased how much they pay members like Sioux Center to construct and have standby generation ready to use. MRES participates because they can then call on that standby generation when electricity is limited or very expensive on the entire grid, reducing their overall cost to provide energy to all members, which in turn benefits members like Sioux Center.
The roughly $21 million project will be funded primarily by MRES. MRES is offering an initial payment of roughly $2.9 million plus 30 years of annual payments to Sioux Center starting at $708,970, potentially increasing each year. Ultimately, payments from MRES would cover an estimated 80-90% of the total project cost – including 30 years of operating costs.
The Sioux Center City Council began considering this option in September 2023. They voted this week to pursue next steps after taking several months to listen for public feedback and receiving favorable comments.
“I heard from multiple people, ‘You would hate to need this backup generation in 10 years and not have it, versus not have it and need it for the incremental cost to us,’” Councilmember Eric Moerman said.
