Grand Marais Public Utilities Commission Board Member George Wilkes gave fellow board members an update on the proposed Grand Marais District Heat Project at their March meeting.
“Our engineer [Mark Spurr] was hoping to send customer contract proposals out but he doesn’t like the numbers he’s gotten from the hospital’s engineer for what their projected heating needs will be,” said Wilkes.
The North Shore Hospital and Care Center is about to engage in a $22.5 million renovation and expansion and Spurr feels the projected heating needs “are about 50 percent higher than they should be,” said Wilkes.
“Can he sit down with the hospital’s engineer and see if they can figure this out?” PUC Board Member Tim Kennedy asked.
“So far no. I think it has something to do with the protocol for the new building. He has been working with Rory Smith [head of hospital maintenance] and Kimber Wraalstad [hospital administrator],” said Wilkes.
“Are they taking this seriously?” asked Kennedy.
“Yes. From everything that Mark has told me, it sounds like it,” Wilkes said.
Spurr hopes to have some new information by April 24 and then will send out the proposed contracts to the 18 customers who have expressed interest in being potential customers.
If the hospital’s engineer’s number is found to be correct, the projected cost to all customers will go up, said Wilkes.
And, said Wilkes, even though the hospital/care center is one client, it is about one-third of the project.
Last year bids came in $4 million higher than projected and the district heating project was slowed. Some new grant money was sought and when it came through it reinvigorated the organizers and the process has begun again in earnest.
Should enough customers sign the proposed 25-year contracts, money will be sought from the Minnesota State Legislature in the next bonding bill and if that is approved [about $2 million] then the project will be rebid with a build-out set for the summer of 2016.
Once completed the district heating system will be owned by the City of Grand Marais Public Utilities Commission and operated as a nonprofit utility.
The initial system will provide heat for 18 of Grand Marais’s largest buildings. Seventy-seven percent of the buildings are public or publically supported buildings: the hospital, clinic, YMCA, schools, churches, county and city buildings and publicly assisted apartment buildings.
Hedstrom Lumber Company will provide wastewood [hog fuel] for the biomass boiler and potentially the slash from loggers’ harvest will be available.
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