With Austin’s northeast power plant soon to be dropped from a contract, the utilities board on Tuesday took a step forward in plans to revamp the facility afterward.

The Southern Minnesota Municipal Power Agency, which has a contract to provide power to Austin and purchase power from local plants, announced in August that they would no longer buy power from the coal-fired plant near Todd Park starting Sept. 1, 2010.

Because Austin Utilities has to buy power from SMMPA, the utilities company would not be able to use the plant, which opened in 1977, for local power generation after the contract expires.

However, the plant can be used independently of that agreement if, for example, Austin Utilities sells the power generated to a third party.

Making the plant viable for such an agreement is now the focus — and the board voted to start a new study that will help determine the future direction of the plant.

Namely, this means looking at converting how the plant runs, quite possibly switching it to some type of biomass facility.

The study, which will be done by engineering consultant Burns and McDonnell, will compare various options and analyze what would be most feasible.

Alex Bumgardner, power production director at Austin Utilities, said the study could start within the next few weeks and take roughly two months.

But when it’s done, it will give Austin Utilities valuable help in deciding how to make the plant attractive to a third party — something Bumgardner said is important now because people have already expressed interest.

Though the actual transition of the plant likely won’t be done before Sept. 1, 2010, Bumgardner said it’s important to try to get everything done as soon as possible so a deal can be made.

“This (study) gives us momentum,” he said.

The study will cost Austin Utilities $120,000 and is slated to come out of next year’s budget.