Kirkwood, CA – Kirkwood Meadows Public Utility District (KMPUD) has closed on its sale of $5.5 million of Bond Anticipation Notes to fund the summer construction of a new power plant for the Kirkwood community and ski resort operations. Construction has been ongoing now for over a month and project managers expect the new building to be erected this fall in Kirkwood.nThe plant will be located immediately north of the former Mountain Utilities power plant that burned to the ground on January 1, 2010, leaving the ski area without power for several days as it has no connection to the state’s power grid. Power was restored once portable diesel generators were brought in, systems that will continue to supply power to the ski area and approximately 700 residential customers until the new facility is complete. The KMPUD continues to pursue the opportunity to construct an interconnection between Kirkwood and Pacific Gas and Electric facilities that are part of the regional electric grid.

The proposed power plant is a new 10,000 square foot diesel-fueled facility that will also allow for the elimination of a separate power generation facility being run to support the water, wastewater, fire and KMPUD operations. The new plant will have similar production capacity to what was destroyed in the fire, but will have air quality, generation, switching and distribution technology meeting current standards, which will dramatically increase power quality and reliability while reducing particulate emissions by over 70% compared to the pre-existing plant. All underground improvements will be completed by the fall and the plant will be operational in 2011.

The KMPUD, which is building the plant under an emergency permit from the Great Basin Air Quality Control District, had faced an appeal of the authority to construct in early July by environmental groups that sought a cleaner burning fuel than diesel. The appeal was denied and construction resumed on the facility.

As a result of the appeal, the plant has been designed for the anticipated changes in generation technology. The facility will be built as a prime diesel power plant but will be flexible enough to accommodate alternative fuels and future renewable energy options like wind and solar arrangements.

The KMPUD is a local publicly elected body that services the Kirkwood community. The KMPUD, which already runs critical community infrastructure in Kirkwood including water, wastewater, fire, parks and snow removal, had previously reached an agreement with Mountainsprings Kirkwood LLC to acquire the electric and gas operations of Mountain Utilities, an investor-owned utility regulated by the California Public Utilities Commission. It has similar ownership to its sister company Kirkwood Mountain Resort. The closing on the power plant location is scheduled for later this month.

“The KMPUD is a great partner in this effort and we are very encouraged by their progress to date. To design, permit and construct a complicated facility like this in this compressed timeframe is impressive,” said David Likins, CEO of Mountainsprings Kirkwood LLC. “It makes a lot of sense to have municipal ownership of electric and gas assets in a small community like this and we have tremendous confidence their ability to add this to their current portfolio of infrastructure operations. The facility will be state of the art and will open up significant opportunities for our resort and real estate operations.”

The first phase of construction includes a significant amount of site work for the building and all of the underground work necessary to repair the circuits that were lost in the New Year’s Day fire. Kirkwood skiers will notice that the upper bay of parking at the Red Cliffs lots have been eliminated to make way for the new facility which will be nearly three times the size of the old plant and significantly more attractive. KMR has worked with the KMPUD to replace that parking with a new slopeside lot located immediately east of the Red Cliffs cafeteria. The new lot will accommodate over three times what was lost in the land use swap.

Mountain Utilities will continue to manage electric and gas operations until the new plant is fully operational and executives are very happy with their interim operations. “The fact that we are replacing the distribution circuits this month that were lost in the fire is the key to improving our reliability. While we made it through last winter with a band-aid approach, we will have full network redundancy and a switchable distribution system fully operational by October,” noted Wayne Amer, President of Mountain Utilities.

Mountain Utilities will operate off of portable diesel generators until the new KMPUD facility is completed. According to Amer, the modular units are significantly more efficient and cleaner burning than the generation that existed prior to the fire. All the transformers, circuits and snowmaking facilities that were lost in the fire will also be replaced prior to the start of the 2010-11 ski and snowboard season.

While the fire had impacts on the ski resort at the tail end of its busy Christmas-New Year’s holiday period, the company seems to have made a full recovery, recently posting its best financial results ever.