Thursday, March 24, 2011
TVA visits with city board
By SUE WATSON
Mayor Andre’ DeBerry, in a surprise move, invited representatives with Energy Systems Group to brief aldermen on a proposal to look at the future needs and present conditions of the gas, water and sewer system and service in the city.
He said it would be the first step, if aldermen approved the plan, to undertake a needs study of the utilities and help obtain proposals and funding for improvement of the infrastructure and the efficiency of the software, and the billing of the three departments.
David Rehse, account executive with ESG, proposed the city take a preliminary look at the infrastructure - the aging cast-iron gas pipe system, and a look at the technology, record keeping and billing. He said the survey would help prioritize what areas would be first in replacing the cast iron with polypropylene pipes. Before the discussion got underway, utilty department general manager Don Hollinsworth reminded the board that Elliott and Britt Engineering has already done a study of the cost to replace the cast iron pipes.
“I am talking about the entire operations, other components of the operation plan and look at the metering system, infrastructure, accounting system and revenue loss – an overall assessment of water, gas and sewer,” DeBerry said.
The plan would seek to solve the problem of loss of revenues (unmetered gas and water loss), he said. The preliminary study would also initiate a request for qualifications and later a request for proposals.
“A third party is needed before taking the proposals to funding agencies,” the mayor said. “Engineering has to be independent of who is assessing it.”
The process would not preclude Elliott and Britt from offering an RFQ or RFP, he said.
Hollingsworth said the city is already mapping the gas system.
DeBerry said the study would look at the overall process and at the utility from “how we build the system out.”
“We all know we have some major issues,” he said. “We’ve got to get something to go to the USDA and say, ‘this is what it will cost, the scope, all information in one project - water, gas, sewer.’ They look at our system and what it is costing us in loss of revenue.”
The mayor said if the city could recoup losses in revenue, it could look at the whole area, especially the Highway 72/Mt. Pleasant area, as areas of expansion of the services.
DeBerry explained to the board of aldermen that the visit from ESG was an orientation session.
“There is no buy-in,” he said. “We want to look at it and get the process started, get the RFQ, then the RFP in time for getting into the funding cycle.”
He said the cycle with the state would be FY 2011 and with the Feds, 2012.
“The study must be the driver, not the end result,” he said.
Dawn Best, with TVA, discussed wholesale rates of electricity and planned rate structure changes there prior to the rate structure changes as they will affect residential users in 2012.
“TVA is revenue neutral in this (wholesale rate component) and it will not make any more money,” said Best. “Customers will pay about the same as now.”
The wholesale rate structure offered would be a seasonal flat rate for the winter, transition months, and the summer or a timed component that takes into account the daily peak and off peak hours.
The wholesale rate structure and contract is effective April 1. The board opted to adopt the seasonal flat-rate structure for wholesale purchase of power.
In 2012, residential customers will be affected by the time of use rate. Best said the transition to this new structure in April is to give residential and other customers some time to get ready. When time-of-use rates go into effect next year, homeowers can choose to run appliances in off-peak hours and reduce their cost of electricity as compared to what will be charged during peak demand.
For residential customers, TVA offers an in-home energy audit that costs $150. The customer has 90 days to make any suggested home improvements that will decrease energy use up to $1,000. If the homeowner gets the work done on time they get what they spent, up to $1,000 plus the $150 for the audit back from TVA.
TVA offers other programs – buy green, and solar panels or windmill-generated power options to save energy costs. TVA will buy the windmill or solar panel power from the homeowner and put the power on the grid.
It could become lucrative for the residential customer to sell the power to TVA and make their power costs “a little more economical,” said Best.
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