City continues work to establish electric utility
Date posted: April 8, 2014
SHERIDAN — Following a request from an attorney representing Montana-Dakota Utilities to table an ordinance that will create a city electric utility to allow more time for discussion, City Council voted 5-0 to approve the ordinance on second reading with the understanding that it may have to be tabled on third reading depending on progress in the next two weeks.
Councilwoman Kristin Kelly recused herself from the discussion and the vote on the electric utility since she works for Powder River Energy Corporation. She would not gain financially from the creation of a city electric utility but wanted to avoid any appearance of conflict of interest.
In the time since Ordinance 2144 was approved on first reading March 18, MDU has been in touch with city attorney Greg Von Krosigk to discuss language suggestions made by MDU to the ordinance, Public Works Director Nic Bateson said. Bateson said some of the suggestions have raised concerns. MDU has suggested language that would restrict who the city may use to operate the system if it is owned by the city, but Von Krosigk and the city’s power consultant are examining if the city would be required to issue requests for proposals before choosing the system’s operator. Bateson also said the leasing infrastructure suggested by MDU may violate state statute.
“We do appreciate MDU’s suggested language; we just need more time,” Bateson said.
The driving reason to form a city electric utility is to increase capacity and redundancy of power north of Sheridan for the High Tech Business Park in order to attract data centers, light manufacturing and other technology businesses.
Bateson said the city would act as a conduit for state funds — primarily business ready grants that allow infrastructure to be built in advance of growth to promote job creation — and would contract out to a company such as MDU for construction, operation and maintenance of the system.
MDU’s attorney, Hayden Heaphy of Davis and Cannon, LLP, said MDU has demonstrated commitment to the project and wants more time to discuss the best way to proceed. Heaphy did note that MDU is not sure it is necessary to establish a city electric utility at all since MDU is committed.
Mayor Dave Kinskey said there is a bit of a race to get the project rolling because the city recently discovered it could become a crossroads for electric, hydro and wind power if it placed a substation near the I-90 Fifth Street exit and capitalized on the area’s cheap power, an idea also being pursued by Buffalo and Gillette.
Banner resident Vicki Taylor approached the council to ask if the establishment of a city utility would somehow serve the interests of newly formed fiber optic company Rocky Mountain Fiber, which is seeking to build a fiber optic superhighway from Billings, Mont., to Denver, Colo. Kinskey, Ptolemy CEO Ryan Mulholland and TMNG Global consultant Joe Sharkey are business partners in Rocky Mountain Fiber.
Kinskey said that Rocky Mountain Fiber will not seek any state funding or grants for its business efforts.