Holland Energy Park Pays Back, Reducing Energy Rates for Holland BPW Customers

Mar 12, 2021 | Blog

Holland Energy Park (HEP) is getting ready to retire $91M of debt this year, during only its fourth year of operation, pending final approval from City Council. Additionally, there is a plan to retire an additional $40M over the next two years, completely retiring the debt in a total nine years since it was issued in 2014. The $240M power generation facility was financed with $160M of debt and $80M of reserves.  Originally, Holland BPW planned to service the bonds for 25 years. Retiring the debt early will save tens of millions of dollars in interest. The reduced cost results in a proposed rate decrease of about 10% for Holland BPW electric customers. “We seek to provide low-cost, reliable, environmentally sustainable energy solutions that enhance quality of life and economic prosperity. Holland Energy Park continues to deliver on that promise,” (Dave Koster, General Manager, Holland BPW).

HEP is a combined-cycle power plant that produces electricity using natural gas. The plant has strengthened the community-owned electric utility since it came online in 2017. HEP provides Holland BPW more electricity than needed; we sell the excess capacity to other providers in Michigan. The utility and the City of Holland have received significant value from selling HEP’s excess capacity. In 2018, Holland BPW was able to reduce electric rates by an average of 6% for customers. This year, Holland BPW electric customers will receive another rate reduction, the second reduction in three years. Also, the wholesale revenue made possible by HEP has allowed the Holland BPW to increase its annual contribution to the City of Holland from $6.6M to $8.0M.


“As a community-owned, not-for-profit entity, Holland BPW turns each dollar our customers spend into the services provided for them. When we are able to experience lower costs, we pass the reduction through in the form of rate decreases. Since Holland Energy Park began operation in 2017, our electric customers have only seen a lowering of rates,” (Koster). Holland BPW’s electric rates rank among the lowest in the State of Michigan. This year’s proposed rate decrease, which averages 10% across all customer classes, will save the average residential customer about $60 on their energy charges over the year. If approved by City Council in May, the new rates will go into effect on July 1, 2021. The rate reduction will make already competitively priced electric bills even more affordable for our community.

Community-based decision making

Building Holland Energy Park was a big community decision. Now the community is in a position of being paid back for this choice. Holland Energy Park is paying back in a variety of ways: economically, environmentally, and socially. Rate decreases and the increased contribution to the city’s general fund demonstrate the economic payback. The average Holland BPW residential customer now enjoys nearly a 40%, or $35 per month rate advantage to the investor-owned utilities in Michigan.

Environmental paybacks are proven through reduced CO2 emissions. HEP, along with investments in renewable energy sources, reduced CO2 emissions from Holland BPW’s portfolio by 46%. Additionally, HEP has virtually eliminated emissions of sulfur dioxide, lead, and mercury from power generation sources in our community.

HEP is the source of the heated water that flows through Holland’s world-renowned snowmelt. The system is engineered to efficiently reuse excess heat created during power generation. Warm water cycles from HEP through 190 miles of tubing located beneath the streets and sidewalks of Downtown Holland, returning to HEP’s cooling towers. HEP increased the potential capacity of the downtown snowmelt to five times the original size. The snowmelt now covers five miles of walkable routes with room to grow.

The community also called for HEP to be a gateway into the City of Holland. The architecture and design enhance the eastern connection to downtown along Chicago Drive and 8th Street. Inside HEP is Energy Alley, an educational hands-on museum that augments tour experiences. Due to the pandemic, we have currently paused tours. However, the nature trail welcomes pedestrians to enjoy the natural landscape and a close-up look at the exterior of HEP.

Renewable Energy Investments

Sustainability was a strong theme that shined through the community engagement process that resulted in Holland Energy Park, known as the P21 Decision. Holland BPW learned what having choices in energy sources means to the community. While HEP is an important capacity resource, Holland BPW continually develops a robust energy portfolio. New investments focus on renewable resources. Holland BPW has a partnership with other municipal electric providers through the Michigan Public Power Agency (MPPA). Through partnerships, Holland BPW is able to participate in projects that make a much greater impact than the utility could accomplish on its own. For example, Holland BPW has purchase power agreements from Michigan’s two largest solar arrays, Assembly I and Invenergy, plus a third solar farm, Assembly II. The new solar farms expect to provide Holland BPW with 16,000 MWh of energy per year, enough to power an average of 1,502 homes1.

1 Holland Board of Public Works. “Electric.” 2020 Annual Report – Holland Board of Public Works, 12 Jan. 2021, annualreports.hollandbpw.com/annualreport2020/electric/#Expansion%20in%20Renewable%20Energy%20Investments.

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