As transmission line project looms, electric rate hike follows

It took three years to develop and agree on the plan for a new transmission line project in south Columbia – deciding whether to bury lines or build poles, which streets it would run and which substations to connect to. In 2013, the city agreed on a plan for eight miles of power lines built from Grindstone Parkway to Scott Blvd., including the construction of a new electric substation next to the Rock Bridge High School baseball field.

Connie Kacprowicz with Columbia Water and Light told ABC 17 News construction should begin in 2017, while engineers have already begun mapping the specifics of the transmission lines’ route.

What’s still uncertain is how the city, and the people who use Columbia Water and Light for its utilities, will pay for it.

“When you’re talking about multi-million dollar projects, it makes more sense to borrow it over a period of time,” Kacprowicz said. “That way, current users of the system aren’t going to be paying for something that’s going to last 30, 40, 50 years. If you go out for bond funding and ensure that future users of the system are paying for that improvement they benefit from.”

At its Tuesday meeting, the Columbia City Council may vote to put a $63.1 million bond issue on April’s ballot. Water and Light plans to use more than half of that money to pay for southern transmission project – a $36 million dollar endeavor. The bond money would also pay for, among other projects, an upgraded natural gas boiler at the Columbia Municipal Power Plant and a new power generator collecting methane gas at the landfill.

“These are all projects that have a long term benefit, so it makes sense to spread the cost over time and have future users of the system that are going to be benefiting from them pay for them,” Kacprowicz said.

Regardless of the bond issue’s success or failure, the city still must build the southern transmission line project. That leaves the 48,000 utility customers with a choice of two rate increases to pay for it. If the bond issue makes it to the ballot in April and passes, Kacprowicz said rates would rise by six percent through four years (three percent in 2015, two percent in 2017 and one percent in 2018). However, if the bond issue fails, rates could rise as high as 25 percent. Kacprowicz said the department had not decided yet the schedule of rate increases in that scenario.

The Columbia City Council would need to approve those rate increases. Kacprowicz estimated any change in utility bills would happen late spring.

So why does the project need to happen? In 2003, a software glitch at an Ohio power company caused a massive blackout in New England. An alarm that would have alerted the company of local outage failed, causing electric power from across the area to “re-route” to make up for the outage, straining systems and blacking out the northeast United States and Ontario, Canada. Authorities reported ten deaths associated with the “cascading failure.”

In response, the Federal Energy Regulatory Commission investigated power supplies and rules across the country to ensure a similar failure wouldn’t happen again. In 2007, the North American Electric Reliability Corporation cited Columbia with several violations, including an improper assessment of its electric capacity.

“That’s why the federal government takes it very seriously, they don’t want any one problem to cause a big problem for the United States, and that’s why the fines are so huge,” Kacprowicz said. “They can fine you up to a million dollars a day for infractions of these rules.”

Outside of the transmission line project, Third Ward councilman Karl Skala believes Water and Light may be able to lower the amount it borrows, and lower the potential rate increase.

“I’d rather ask for something a little bit less and get something than get nothing,” Skala said.

He pointed to the $10.35 million dedicated to “Replacement & Upgrade of Existing Infrastructure.” Kacprowicz said many of the projects involved in the category are ones related to buried lines, and replacing those that suffered damage. Skala plans to ask the department to try and prioritize those projects, and leave out others from the bond issuance.

“And in this particular political climate, I think we ought to do our due diligence to make sure that we can pare this down to as bare bones as possible,” Skala said, referring to the failed tax increases and development fees in the last two elections.

Water and Light has already removed some capital improvement projects from the list, Kacprowicz said, including another transmission line route south to McBaine. Kacprowicz said the department usually plans to use bond funding for 80% of its projects, but this package covers 72%.

The electric bond issue will not be the last infrastructure-related ballot issues people in Columbia will see this year. A quarter-cent sales tax for capital improvement projects and an eighth-cent sales tax for Columbia parks may also be on ballots this year. For that reason, Skala said it’s important the Columbia City Council, city departments and the public be picky about the projects involved.

“There are a lot of infrastructure goodwill causes, and each one of the departments has their own vested interest,” Skala said. “Some of us have to balance this out, because it’s just too much to ask of the community unless you’re very careful on how you approach these things.

“The only way to do this is with the cooperation of the community and the respective departments,” Skala said.