LANSING – The Lansing Board of Water and Light and the Lansing Area Building Trades in late June agreed to utilize a project labor agreement (PLA) for the construction of a new $182 million combined-cycle co-generation power plant.

The natural gas-fueled plant will produce 100 megawatts of electricity and create both steam and electricity. It will be located on the southern edge of the Reo Town business district. Ground was broken on the project on May 25, and the plant is scheduled to become fully operational in early 2013.

“We’ve been working on the PLA since last September , and it’s nice to put this to bed before we lose PLAs in Michigan,” said Lansing Area Building Trades President Jim Bitzer on June 29. “The Board of Water and Light has always been a great community partner and the building trades have a very strong partnership with them.”

Richard Peffley, the BWL’s executive director of special projects said the utility “has always been supportive of the local trades, and we thought the use of a PLA was the most practical and economic way to get the plant built. We wanted the best quality labor at the best price, and the PLA does that for us.”

A chilled water system installed by the BWL a few years ago successfully employed a project labor agreement, and both Peffley and Bitzer said it acted as a blueprint for this pact. “That agreement was very positive and worked very well for us,” Peffley said. Christman Construction is acting as construction manager on the co-generation project.

For a number of years, the Board of Water and Light has been eyeing the replacement of the Moore’s Park Steam Plant. According to the BWL, three of the four steam generation units at the facility are more than 55 years old, and the fourth unit is 43 years old. The Moores Park plant, located next to the BWL’s Eckert Power Plant, must be retired within a few years because of “numerous and costly environmental regulations,” the BWL said.

By switching to natural gas at the new facility, the BWL will avoid burning 139,000 tons of coal each year. A combined-cycle co-generation facility uses natural gas to generate steam and electricity in a two-step process. First, a gas turbine burns natural gas to directly turn an electric generator. It then efficiently captures the hot exhaust to produce steam, which can be delivered to steam heating customers or used to turn a second electric generator.

“Today, we begin a bold, new chapter in the BWL’s 126-year history,” said BWL General Manager J. Peter Lark at the May groundbreaking. “Our co-generation facility will use natural gas to generate both electricity and steam for our customers. By switching to natural gas, we will reduce greenhouse gas emissions by 50 percent, compared to an existing coal-fired plant.

“Moreover, the 18-month construction phase will create more than 1,000 local jobs, and when the project is completed, the facility will house 180 BWL employees – a huge economic catalyst for Reo Town.”

The BWL provides steam to heat buildings in downtown Lansing as well as to the nearby General Motors Grand River Assembly Plant. The BWL has 225 steam customers, including government offices for the State of Michigan and the City of Lansing; the Accident Fund, Lansing Community College, Boji Tower, the state Capitol building and the new Michigan State Police Headquarters.

Reo Town was the site of the Diamond Reo Truck Company, founded by Ransom E. Olds, the father of the Oldsmobile.

A nice sideline feature is the BWL’s restoration of the nearby historic Grand Trunk Western Railroad Depot, located near the intersection of Washington Avenue and South Street. Built in 1902, the depot is on the Michigan Register of Historic Sites, but is in deteriorating condition and has been closed to the public for several years.